.About This Report 01 Innovation and Quality Appendix

Message from the Chairman 03 Improvement ESG Performance Overview 145

About Xingfa Group 05 Driving Industrial Upgrades Indexes 153

Feedback Form 155

Innovation-Driven Development 87

Safety and Quality of Products and Services 98

Standardized Governance Sustainable Supply Chains 106

Information Security and Privacy Protection 111

Strengthening the Foundation for Development

Sustainable Development Governance 23

Party Building Leadership 31 Social Responsibility

Governance through the General Meeting of Shareholders Board of Directors and Supervisory Board 34 Fulfillment

Management of Remuneration for Directors Supervisors and Senior Management 37

Compliant Operations 39 Co-creating a Better Future

Protection of Shareholders’ Rights and Interests 44

Business Ethics 46

Protection of Employees’ Rights and Interests 117

Training and Development 128

Circular Economy Occupational Health and Safety 133

Active Response to National Initiatives 141

Building a Shared Ecological Future Rural Revitalization 142

Social Welfare 144

Opportunities in Clean Technology 51

Response to Climate Change 55

Environmental Management 60

Resource Utilization 70

Ecological Protection and Biodiversity 81About This ReportThis is the sixteenth Environmental Social and Governance (ESG) Report issued by Hubei Xingfa Chemicals Group Co. Ltd. (“theCompany”). Adhering to principles of objectivity standardization transparency and comprehensiveness the report offers a

detailed exposition of Xingfa Group's practices and performance in the realms of environmental social and governance for the year

2024.

Reporting Scope Reporting Period Appellation Description

For ease of expression and readability “Hubei Xingfa Chemicals Group Co. Ltd.” is also referred to as “Xingfa Group” “the Company”

This report covers Hubei Xingfa Chemicals Group Co. Ltd. and This report covers the period from January 1 2024 to December

or “We” in this report. In addition "the State" and "the government" in this report refer to the People's Republic of China and its

its subsidiaries and direct affiliates. Unless otherwise stated 31 2024 (the “Reporting Period”). To improve the comparability

administrative agencies.the scope of this report is consistent with the scope of the and completeness some sections of this report may be appro-

Company’s Annual Report. priately referred to previous years or contain forward-looking

statements. This report is released on an annual basis consis- Short Name Full Name

tent with the financial year. Yichang Xingfa Yichang Xingfa Group Co. Ltd.Xingfa Group the Company and We Hubei Xingfa Chemicals Group Co. Ltd.Jixing Chemical Hubei Jixing Chemical Group Co. Ltd.Xiangyang Xingfa Xiangyang Xingfa Chemical Co. Ltd.Impact Duration Data Sources and Reliability Assurance Xinjiang Xingfa Xinjiang Xingfa Chemical Co. Ltd.Xingfa Jinguan Chongqing Xingfa Jinguan Chemical Co. Ltd.The impact duration in this report is defined as short term The sources of data used in the report include the original Hubei Xingrui Hubei Xingrui Silicon Materials Co. Ltd.(within 1 year) medium term (1 to 5 years) and long term data of the Company's actual operation public data from

Trisun Chemical Hubei Trisun Chemical Co. Ltd.(more than 5 years). government departments annual financial data relevant

internal statistical statements third-party questionnaires and Inner Mongolia Xingfa Inner Mongolia Xingfa Technology Co. Ltd.third-party evaluation interviews. All financial data in this Longma Phosphorus Industry Weng'an Longma Phosphorus Industry Co. Ltd.report are denominated in RMB. In the event of any inconsis- Baokang Chufeng Baokang Chufeng Chemical Co. Ltd.tency with the financial statements the latter shall prevail.Sinophorus Electronic Hubei Sinophorus Electronic Materials Co. Ltd.Guizhou Xingfa Guizhou Xingfa Chemical Co. Ltd.Yidu Xingfa Yidu Xingfa Chemical Co. Ltd.Preparation Basis

Access to this Report Feedback

State-owned Assets Supervision and Administration Commission of the State Council Study on the Preparation of ESG Special

Reports of Listed Companies Controlled by Central State-owned Enterprises

You can browse or download this report on the websites of the If you have any comments or suggestions concerning this report

UN Sustainable Development Goals (SDGs) Shanghai Stock Exchange (https://www.sse.com.cn) cninfo please feel free to contact us through the following ways.(http://www.cninfo.com.cn) or Hubei Xingfa Chemicals Group

China Enterprise Reform and Development Society Guide to Corporate Sustainability Reporting in China (CASS-ESG 6.0)

Co. Ltd. (https://www.xingfagroup.com). Email: dmb@xingfagroup.com

Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulation of Listed Companies—Sustainability Report (Trial)

Tel.: 0717-6760939

Global Reporting Initiative Sustainability Reporting Standards (GRI Standards)

Address: Room 3313 Xingfa Building No. 188-9 Yanjiang

Sustainability Accounting Standards Board (SASB) Standards

Avenue Wujiagang District Yichang City Hubei Province China

1 22024 Environmental Social and Governance (ESG) Report

Message from the Chairman

Dear shareholders partners and friends

Thank you for reading this report. On behalf of Xingfa Group I wish to extend my deepest appreciation for your In the past year we fulfilled our social responsibilities to create a

unwavering support and trust throughout the Company’s growth journey. better future together. Our total investment in social welfare

exceeded RMB100 million reaching a record high. For rural revital-

The year 2024 was marked by a volatile global economic environment amid escalating resource scarcity and ization we focused on helping Shukongping Village and Maocaop-

environmental pressures. Against this backdrop Xingfa Group remains unwavering in its commitment to sustain- ing Village in Xingshan County achieve economic development and

able development principles consistently advancing a green and circular growth model. The Company has livelihood improvement by means such as industrial assistance and

integrated the ESG(Environmental Social and Governance) strategy as a cornerstone of its business operations talent cultivation. Meanwhile we attached great importance to the

driving synergistic progress across economic social and environmental dimensions with resolute action. protection of employees' rights and interests steadily increasing

In the past year we reinforced standardized governance mechanisms to solidify our development foundation. employees’ income levels. We have set up a vocational training

Through the revision of key governance policies we established a robust institutional framework to clarify the school for employees and increased investment in employees'

roles and responsibilities of directors supervisors and senior executives while empowering to independent training to provide employees with vast opportunities for devel-

directors to exercise greater oversight. While ensuring steady dividend growth we strengthened value manage- opment.ment by repurchasing and canceling company shares implementing an Employee Stock Ownership Plan(ESOP) Looking ahead to 2025 we will continue to uphold the philosophy

and incentivizing major shareholders to augment their equity positions. The quality of our information disclosure of sustainable development deepen the implementation of the

remains at industry-leading standards. We have conducted all forms of investor engagement activities to ESG strategy further enhance corporate governance and improve

enhance market confidence and stakeholder alignment. decision-making efficiency. We will also increase R&D investment

In the past year we insisted on a circular economy to build a shared ecological future. Through initiatives such as to drive technological innovations; strengthen environmentaloptimizing energy structure promoting energy conservation and emission reduction and constructing photovol- protection to promote the achievement of the “carbon peakingtaic power plants we improved the efficiency of energy resources. Anchored in the statutory requirements of the and carbon neutrality” goals; and actively fulfill social responsibili-

environmental protection bottom line and with the courage of transformative innovation we continuously ties for public welfare and rural revitalization. Moreover we will

improve the environmental protection standards and energy efficiency of the industry challenge the limit of continuously improve product quality and strengthen supply chain

resource recycling and strive to unlock more "virtuous cycles" within the circular economy. management to lay a solid foundation for the high-quality devel-

opment of the Company.In the past year we accelerated industrial upgrading through steadfast innovation and quality excellence. Our

R&D investment reached RMB 1.188 billion. Our R&D team with 1613 members obtained 1421 authorized Finally I’d like to thank you again for your support and trust. Let’s

patents. Through R&D and innovation we successfully developed a series of new products with high value-add- join hands to create a better future together!

ed further improving product quality. We also implemented strict quality control and enhanced the quality

management system to ensure every step complied with national and industry standards. In supply chain

management we built a sustainable supply chain and worked closely with suppliers to ensure the green and

stable supply of raw materials. Chairman of Hubei Xingfa Chemicals Group Co. Ltd.Li Guozhang

3 42024 Environmental Social and Governance (ESG) Report

About Xingfa Group

Company Profile Organizational Structure

Hubei Xingfa Chemicals Group Co. Ltd. was established

in 1994 with its registered office in Xingshan County General

Yichang City Hubei Province. Listed on the Shanghai Meeting of Shareholders

Stock Exchange in 1999 (Stock Code: 600141.SH) the

the Company Company has evolved into a globally leading enterprise

has evolved into a globally specialized in phosphorus-based fine chemicals and

Board of Directors Supervisory Board

leading enterprise specialized committed to green and circular development.????

in phosphorus-based fine

chemicals and committed to Xingfa Group ranked 475th among 2024 Fortune China Development Strategy Committee

green and circular develop- 500. On April 24 2018 President Xi Jinping made

ment. Xingfa Group the first stop during his inspection tour in Board Secretary General Manager

Audit Committee

Hubei giving full recognition to our performance in Nomination Remuneration and

green transformation and development. Li Zhanshu Assessment Committee

then Chairman of the Standing Committee of the Deputy General Manager

National People's Congress and Li Qiang Premier of

Xingfa Group ranked the State Council visited the Company respectively on

475th June 30 2022 and January 2 2024 encouraging Xingfa Group to continuously promote scientific and techno-

among 2024 Fortune logical innovation and to pursue the path of ecological

China 500 priority and green development.

56

Equipment Management

Department

Marketing Management

Department

Information Center

Technology Center

Mineral Resource Department

Logistics Department

Legal Department

Phosphorus and Sulfur

Chemical Division

Internal Control Department

Safety and Environmental

Protection Department

Investment Development

Department

Tendering Office

Quality Management

Department

Marketing Department

Procurement Department

Human Resources Department

Planning and Assessment

Department

Finance Department

Audit Department

General Manager’s Office

Board Secretary’s Office2024 Environmental Social and Governance (ESG) Report

Corporate Culture

Striving to be recognized as Business Scope“China’s Mightiest and MostWorld Renowned InternationalFine Chemicals Enterprise”. Xingfa Group strengthens innovation-driven development and accelerates the green high-end and

Corporate Vision international transformation of the industrial chain. The Company develops products in 9 categories

26 series and 674 varieties including food-grade pharmaceutical-grade and electronic-grade

products. Through participation in the formulation and revision of 108 international national andindustry standards the Company has formed a “resource and energy-based fine chemical indus-try-led and related industries-supported” development pattern.Our main products include phosphate rock specialty chemicals pesticide products organosilicon

Mission series products fertilizers new energy materials etc. These products are widely used in food

To be the innovative agriculture integrated circuits automotive construction chemical and other sectors.technology and science Corporate

driven world leader in the

fine phosphorus chemical Values

industry thus creating Employee-oriented

value for our society Integrity-keeping

shareholders employees Excellence-striving

and partners Scientific-processing

Glyphosate Products Organosilicon Series Products

Production Capacity： Production Capacity：

Glyphosate Technical: 230000 tons/year; supporting Organosilicon monomer: 600000 tons/year; methyl vinyl

formulations: 101000 tons/year silicone rubber: 120000 tons/year; hydroxyl terminated

Phosphate Rock Specialty Chemicals polydimethylsiloxane: 120000 tons/year; sealant: 60000

tons/year; silicone fluid: 56000 tons/year; aerogel: 5000

Production Capacity: Production Capacity of Main Products: cubic meters/year; microcapsules: 550 tons/year; silicone

leather: 1 million meters/year; silicone foam: 150000

Phosphate Rock Resource Reserves with the Mining Electronic Chemicals: electronic-grade phosphoric acid: square meters/year.Right: about 395 million tons 60000 tons/year; electronic-grade sulfuric acid: 100000

tons/year; electronic-grade hydrogen peroxide: 30000

Phosphate Rock Resource Reserves at the Prospecting tons/year; functional wet electronic chemicals: 54000

Stage or the Prospecting-to-Mining Transition Stage: tons/year; electronic-grade ammonia: 20000 tons/year Fertilizers New Energy Materials

412 million tons (proven reserve) (accompanying electronic-grade ammonia gas:10000

Designed Phosphate Rock Production Capacity: 5.85 tons/year) Production Capacity of Main Products: Production Capacity：

million tons/year Food Additives: food-grade phosphate: over 150000 Ammonium phosphate: 1 million tons/year; compound Photovoltaic adhesive: 50000 tons/year

tons/year fertilizer: 400000 tons/year; wet-process phosphoric acid (in Iron phosphate: 100000 tons/year

100% acid equivalent): 680000 tons/year; refining purifica- Lithium iron phosphate: 80000 tons/year

Industrial Solvents and Others: dimethyl sulfoxide

tion of phosphoric acid (in 100% acid equivalent): 150000 Lithium dihydrogen phosphate: 100000 tons/year

(DMSO): 60000 tons/year; sodium hypophosphite: 40000

tons/year; sulfuric acid: 2 million tons/year synthetic ammo-

tons/year

nia: 400000 tons/year.

7 82024 Environmental Social and Governance (ESG) Report

Xingfa Group maintains a flagship position in global phosphorus and Xingfa Group has risen to a leading position in China’s new microelec-

sulfur chemical industry. tronic material market

Focusing on the construction of Hubei's electronic chemicals zone and the intensive cluster development of the high-end

Xingfa Group focuses on resource and energy integration at the upstream while on the electronic chemicals industries Xingfa Group has developed products such as electronic-grade phosphoric acid sulfuric

deep processing of products on the downstream forming a mineral-electricity-chemical acid hydrofluoric acid etching solutions hydrogen peroxide etc. Among others our electronic-grade phosphoric acid

industry chain with a cost advantage. sulfuric acid and mixed series products have broken the foreign technical blockade with industry-leading production

capacity and international first-class quality. We have become stable suppliers for many domestic and international

semiconductor companies. The high-purity yellow phosphorus purification and distillation technology solves the impurity

Strong Foundation in Phosphate Rock Resources problem in the preparation of electronic chemicals in China. The key technology for electronic-grade phosphoric acid has

won the second prize of the National Science and Technology Progress Award. The electronic-grade sulfuric acid meets

international standards and has achieved stable supply to domestic 12-inch wafer fabs. The core technology of high-per-

Xingfa Group leads the integration of phosphate rock resources in Hubei Province formance etching solutions breaks the foreign monopoly fills the gap in advanced domestic processes and provides

and its 6 green mines provide sufficient resource support for the development of products like D etching solution E etching solution and polycrystalline silicon etching solution to support chip localization

phosphorus chemical industry. The Shukongping Mining Area in Xingshan County was making us the sole domestic supplier of such products.included in the first batch of national green mining demonstration areas. We solve the

global problem with the mining technology of thick and large phosphate rocks and Xingfa Group is one of the top Chinese manufacturers for comprehen-

develop supporting processes such as gravity separation color sorting flotation and sive strength in organosilicon products.photoelectric sorting. Our recovery rate and utilization rate of phosphate rock

With the Yichang New Materials Industrial Park as the main battlefield Xingfa Group vigorously promotes the integration

resources are among the top in the industry.of phosphorus and silicon development establishing a 600000-ton/year silicon monomer plant with supporting facilities

of methyl vinyl silicone rubber (120000 tons/year) hydroxyl terminated polydimethylsiloxane (120000 tons/year) sealant

(60000 tons/year) and silicone fluid (56000 tons/year). Our monomer production technology fills the gap in Hubei. We

independently developed the first large diameter U-shaped tube fluidized-bed reactor and innovated key technologies to

Stable Power Supply control monomer synthesis and separation. More than one of our key processes has reached international advanced levels.Xingfa Group ranks first domestically and second globally in the

Xingfa Group uniformly oversees small hydropower resources in Xingshan County production scale of glyphosate pesticide.and realizes an installed capacity of 180300 kW in hydropower stations and an annual

power generation of 500 million kWh. 13 distributed photovoltaic power stations have Based on the Yichang New Materials Industrial Park and in coordination with the Inner Mongolia Wuhai Park we have

been built in the basin with a total installed capacity of 1828 kW. The Company is implemented technological upgrades to our glyphosate plant increasing our production capacity of technical material to

accelerating the construction of a clean low-carbon safe efficient and smart 230000 tons/year which remains first in China and second in the world. A supporting production line has been completed

interconnected modern energy system. The protective development of hydropower with a capacity of 101000 tons/year glyphosate formulation (including granules at 51000 tons/year and liquid formula-

has been undertaken and Xingshan County is the first Chinese county awarded as a tions at 50000 tons/year). The Company has also pioneered a new environmentally efficient synthesis process that solves

“Green Hydropower Demonstration Base” by the International Center on Small major environmental challenges in the industry addressing challenges like discontinuous production and high energy

Hydropower of the United Nations. The Gaolan River Basin and the Nanyang River consumption. With the leading cost control and clean production the Company is one of the first four enterprises to pass

Basin have been recognized as the “National Water Conservancy Scenic Areas”. environmental inspections nationwide.Xingfa Group sets a benchmark for resource integration in the field

of phosphate fertilizer development.With a focus on resource integration and based at the Yidu Green Eco-Industrial Park the Company has established a

total scale of 1 million tons/year of ammonium phosphate 2 million tons/year of sulfuric acid 3 million tons/year of ore

Significant Advantage in Chemical Industry dressing 150000 tons/year of wet-process phosphoric acid refinement 20000 tons/year of anhydrous hydrofluoric acid

400000 tons/year of synthetic ammonia and 10 million tons/year of cargo docks. It has connected the wet and thermal

Rooted in Xingshan County Xingfa Group radiates to Xiaoting Yuan’an Nanzhang processes and formed a mineral fertilizer industrial chain integrating ore dressing wet-process acid refinement and

Baokang and expands into Guizhou Jiangsu Chongqing and Xinjiang to build an fertilizer production. It has been awarded the title of "National Demonstration Base for Comprehensive Utilization of

international first-class phosphorus-sulfur product production base. The phosphate Low-Grade Phosphorus Ore."

chemical products of the Company feature the largest national capacity and the most

complete categories. The production and sales of our sodium hypophosphite and Xingfa Group accelerates the pace of evolving into a nationally

dimethyl sulfoxide are the largest in the world. Our high-end phosphates with interna- renowned supplier of high-quality new energy materials.tionally leading quality make us one of the largest global suppliers of food-grade The Company is accelerating the construction of projects such as the 300000 tons/year iron phosphate project the

phosphates. 300000 tons/year lithium iron phosphate project and the 20000 tons/year lithium bis(fluorosulfonyl)imide project. We

have made breakthroughs in the core processes of lithium manganese iron phosphate and all-vanadium redox flow

batteries and advanced the battery-grade lithium fluoride technology to build an industrial cluster for new energy

battery materials.

910

Company Advantages and Industry Position2024 Environmental Social and Governance (ESG) Report

Always focusing on the development of the phosphorus-based fine chemicals Xingfa Group actively explores

the integration of phosphorus silicon sulfur salt and fluorine and constantly improves the upstream and

downstream integration of the industrial chain to create the unique industrial chain advantages of

"mining-electrification integration" "phosphorus-silicon-salt synergy" and "mineral-fertilizer combination".Now the Company is accelerating the transformation and upgrading to become a technology-based supplier of

green chemicals and new materials.Main Raw Materials Main Intermediates Main Downstream Products Main Downstream Applications

Natural gas Sulfuric Acid Refined Anhydrous Electronic-grade Electronic-grade Wet electronic chemicals are widely used in processes Phosphoric Acid Hydrofluoric Acid Electronic-gradePhosphoric Acid Sulfuric Acid Ammonia Water such as

Electronic-grade Electronic-grade Electronic-grade etching cleaning developing and stripping in the manu-

Hydrogen Peroxide Hydrofluoric Acid Mixed Solution facturing of integrated circuits and LCD panels.Methanol Yellow Wet-Process

phosphorus Phosphoric Acid Dimethylphosphite

Lithium Iron Battery cathode materials are widely applied in fields Iron Phosphate Lithium Dihydrogen

Phosphate Phosphate such as

Sulfur EV batteries and large-capacity energy storage batteries.Phosphorus Thermal-Process Organosilicon

Trichloride Phosphoric Acid Crude Monomer

Food-grade Industrial-grade Compound

Phosphates Phosphates Phosphates

High-value fine phosphoric chemicals are widely used in

Phosphate Rock Sodium Sodium Phosphorus-BasedHypophosphite Pyrophosphate Flame Retardant fields such as

Chlor-Alkali Synthetic Ammonia Methyltrichlorosilane Dimethyl food pharmaceuticals pesticides carbon fiber and

Sulfoxide (DMSO) Dimethyl Sulfide Dimethyl Disulfide cables mainly as additives solvents etc.Coal

24-Dichlorophe-

Methyl Chloride DMC Methylhydrogendi- Glyphosate Productschlorosilane noxyacetic acid Nicosulfuron Green low-toxicity herbicides are mainly used for efficient technical (24-D TC) weeding of bulk economic crops such as

Salt soybeans corns cottons and cassavas.Hydroxyl Terminated Photovoltaic Construction

Industrial Silicon Glycine Trimethylchlorosilane Polydimethylsiloxane Adhesive Sealant

Methyl Vinyl High Temperature

Silicon Ore Silicone Rubber Rubber Compound

Polydimethylsiloxane New organosilicon materials are widely used in sectors

such as

Vinyl Silicone Fluid Liquid SiliconeRubber Aerogel electronics photovoltaics aerospace automotives

Dimethyl Sulfide Hydrogen Peroxide construction medical care nursing and daily chemicals

Hydroelectric Photovoltaic Microcapsules Silicone Leather Silicone Foam as heat-resistant bonding materials.and other clean energy and

purchased power

Monoammonium Diammonium Phosphate fertilizers and compound fertilizers are widely

Phosphate Phosphate Compound Fertilizer used in various crop planting processes.Self-owned Purchased Self-owned

& Purchased

1112

Circular Industrial Chain2024 Environmental Social and Governance (ESG) Report

Global Layout of Businesses and Markets

BON AGRO LTD. Xingfa Europe PT Adil Makmur Fajar Xingfa USA Xingfa Argentina Xingfa Brazil

Xingfa Hong Kong

Vietnam Office

BON AGRO (SINGAPORE) PTE Xingfa Australia

Legend

State Boundary

Undetermined

Country Boundary

1:57000000

Review Number:

Supervised by the Ministry of Natural Resources

Aksu

Wuhai

Tianjin

Huixian

Yichang Taizhou

Ngawa Headquarters Shanghai

Xiangyang Xingfa Group has established production bases in various locations

Chongqing Tianmen

including Baokang Nanzhang Gucheng Xiaoting Yidu Yuan'an

Fuquan Tianmen in Hubei as well as Chongqing Jiangsu Xinjiang Guizhou

Weng’an Sichuan Henan Inner Mongolia and Indonesia. The Company has set up

Guangzhou Our products are

regional marketing platforms in countries and regions such as the United exported to

Hong Kong States Brazil Germany Argentina Vietnam Australia Ghana in Africa

Hong Kong in China and Singapore. In addition long-term partnerships

have been established with several Fortune 500 companies such as Dow 131 countries and regions

Chemical Unilever Intel SK Hynix and Coca-Cola. Our products are

exported to 131 countries and regions solidifying our leading position in

the industry nationwide.

13 142024 Environmental Social and Governance (ESG) Report

Milestones

1978198419941996199920032005The first large Established the Established the Hubei Renamed from “Hubei Listed on the Shanghai Gradually established Completed Yichang Newhydropower station Xingshan County Xingfa Chemicals Co. Xingfa Chemicals Co. Stock Exchange with the production bases in Materials Industrial Park(the Houzibao Chemicals Factory the Ltd. Ltd.” to “Hubei Xingfa stock name "Xingfa Shennongjia Xiangyang and put it into operationHydropower Station) predecessor of the Chemicals Group Co. Group" and stock code Baokang and othercompleted and put into Company Ltd.” "600141.SH". locations.operation 2012

Completed Yidu Green

Eco-Industrial Park and

put it into operation and

established two compa-

nies - Guizhou Xingfa and

Longma Phosphorus

Industry.

202520242023202120182015

On January 22 Hubei Successfully acquired the Acquired PT Adil Makmur Inaugurated Hubei Three Acquired the former Inner Completed the acquisition

Sinophorus Electronic equity of BON AGRO LTD. Fajar Gorges Laboratory Mongolia Tenglong of Jixing Chemical.Materials Co. Ltd. the and Xingfa Brazil Co. Ltd. Bio-fine Chemicals Co.subsidiary of the Company and established BON AGRO Ltd. which was later

(Stock Abbreviation: (SINGAPORE) PTE. LTD. and renamed Inner Mongolia

Sinophorus Electronic Xingfa Australia Pty Ltd Xingfa Technology Co.Stock Code: 688545.SH) with the total number of Ltd.was officially listed on the overseas platforms reaching

STAR Market of the 10 basically covering the

Shanghai Stock Exchange. world's major markets and

further improving our global

layout.

15 162024 Environmental Social and Governance (ESG) Report

Honors in 2024 Industry Associations

Outstanding Contribution 2023 Energy Efficiency

Award in China Chemical Leader Benchmark Enter- 2023 Energy Efficiency

Mining Industry prise (Yellow Phosphorus) “Leaders” in Key Industries

Awarding Authority: Awarding Authority: Awarding Authority:

China Chemical Mining China Petroleum and Chemical Ministry of Industry and Association Name Position Held

Association Industry Federation Information Technology

Phosphorus Chemical Branch of China Inorganic Salts

Industry Association Chairman

China Inorganic Salts Industry Association Vice Chairman

First Prize for Hubei Second Prize of Hubei Third Prize of Hubei Science

Scientific and Technologi- Science and Technology and Technology Progress

cal Progress Award Progress Award 2024 Award 2024 China Petroleum and Chemical Industry Federation Vice Chairman

Awarding Authority: Awarding Authority: Awarding Authority:

China Petroleum and People‘s Government of People’s Government of China Chemical Mining Association Vice Chairman

Chemical Industry Federation Hubei Province Hubei Province

China Chamber of Commerce of Metals Minerals &

Chemicals Importers and Exporters Vice Chairman

China Meat Association Vice Chairman

National “March 8” Red May 1st Labor Certificate of Worker Pioneer of Hubei

Flag Collective Hubei Province Province Chemical New Materials Committee of the China

Petroleum and Chemical Industry Federation Vice Director Unit

Awarding Authority: Awarding Authority: Awarding Authority:

All-China Women’s Federation Hubei Federation of Trade Unions Hubei Federation of Trade Unions China Association of Fluorine and Silicon Industry Vice President

China Phosphate and Compound Fertilizer Industry

Association Vice President

Enterprise of Observing Water-saving Benchmark 2023 Single Champion Enterprise China Chemical Environmental Protection Association Vice President

Contract and Valuing Credit in Enterprise in Guizhou in the Manufacturing Industry of

Hubei Province Province Shandong Province China Electronic Chemical Materials Alliance Vice President

Awarding Authority: Awarding Authority: Awarding Authority:

Hubei Administration for Water Conservancy Depart- Department of Economy and Mineral Resources and Material Application Innovation Vice President

Market Regulation ment of Guizhou Province Information Technology of Hubei Association

Province

China Nitrogen Fertilizer Industry Association Executive Director

Excellent Practice Case of the China Sulfuric Acid Industry Association Director

Outstanding Information 5A Rating for Board Secretary's Office of the Board of

Disclosure in 2023-2024 Performance Directors

China Crop Protection Industry Association (CCPIA) Director

Awarding Authority: Awarding Authority: Awarding Authority:

Shanghai Stock Exchange (SSE) China Association for Public China Association for Public China Controlled Chemicals Association Director

Companies Companies

Patent Protection Association of China Director

Outstanding Board Secretary China Association for Quality Inspection Director

2024 Golden Quality Award for Award for Investor Relations of

Outstanding Board Secretary Listed Companies in China Excellent Case of ESG Practices China Association of Pesticide Development and Application Director

Association

Awarding Authority: Awarding Authority: Awarding Authority:

Shanghai Securities News Securities Times Chinese Securities Journal

17 182024 Environmental Social and Governance (ESG) Report

Performance Highlights in 2024

Economic Governance

Performance Performance

General Meeting of Shareholders

Total Assets Operating Revenue Meetings of Party Committee Held Convened

RMB 47.776 billion RMB 28.396 billion 20 Sessions 4 Sessions

Net Profit Attributable to Sharehold Meetings of the Board of Directors Meetings of the Supervisory Board

Net Profit ers of the Parent Company Convened Convened

RMB 1.619 billion RMB 1.601 billion 9 Sessions 8 Sessions

Specialized Meetings of Independent Meetings of Specialized Committees

Directors under the Board of Directors

Environmental

Performance 4 Sessions 13 Sessions

Total Investment in Environmental

Protection Total Green Power Consumption

3.76 in RMB 100 million 10 in 100 million kWh

Total Energy Consumption Total GHG Emissions R&D

Performance

203.64 in 10000 tce 643.2 in 10000 tCO2e

Total R&D Investment Percentage in Operating Revenue

RMB 1.188 billion 4.18%

Social

Performance Number of R&D Proportion in Total

Team Members Number of Employees Total Number of Authorized Patents

Number of Employees of Minority

Total Number of Employees Nationalities 1613 Persons 11.42% 1421Items

14121 Persons 778 Persons

Specialized and Sophisticated Enterprise

Total Investment in Employee Training External Donation that Produces Novel and Unique Products National High-tech Enterprises

2102.47 in RMB 10000 10731.02 in RMB 10000 6 16

19 2001 StandardizedGovernance

Strengthening the Foundation

ffoorr Development

SDGs Responded in this Chapter

Material ESG Topics Covered in this Chapter

□ Anti-Commercial Bribery and Anti-Corruption

□ Anti-Unfair Competition

Key Achievements in 2024

General Meeting of Meetings of the Board Meetings of the

Shareholders Convened of Directors Convened Supervisory Board Convened

498

Proposals Reviewed and Proposals Reviewed and Proposals Reviewed and

Approved Approved Approved

185626

21 222024 Environmental Social and Governance (ESG) Report

Sustainable Development Governance Sustainable Development Goal and Vision

Adhering to the vision of striving to be recognized as “most world-renowned international fine chemicals enterprise” Xingfa Group

is firmly committed to implementing the sustainable development strategy. The Company relies on technological innovation to

optimize the circular economy efficiently utilize resources and actively promote the industry’s response to the call for sustainable

development. We aim to create economic and social value set a benchmark for sustainable development in the industry and become

a model for sustainable development within the sector.End poverty in all its forms everywhere Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development

The Company actively participates in rural revitalization and the "Belt and Road" initiative and provides technical financial and The Company strengthens close communication with investors establishes regular communication channels and listens carefully to the voices of all

medical support demonstrating a firm commitment to social responsibility through practical actions. stakeholders;

The Company attaches importance to the enhancement of suppliers' capability and is committed to the synergistic development with suppliers. Through the

establishment of a supplier management system and a digital management system the Company maintains close cooperation and exchanges with suppliers

to achieve mutual benefits and win-win benefits.End hunger achieve food security and improved nutrition and promote sustainable agriculture

Promote peaceful and inclusive societies for sustainable development provide access to justice

The Company actively provides more green plant protection services for agriculture in Indonesia and Southeast Asia supporting the for all and build effective accountable and inclusive institutions at all levels

sustainable development of the local economy and farmers. The Company improves governance capabilities and risk management levels ensures long-term development and maximizes benefits

strictly enforces internal control and risk management practices ensuring the steady development of the Company;

The Company resolutely eliminates any form of child labor and forced labor actively protects workers' legal rights and interests and strives to

Ensure healthy lives and promote well-being for all at all ages fulfill social responsibility and ethical standards.The Company attaches great importance to employees' occupational health and safety enhances safety awareness and creates a safe and healthy

working environment. Protect restore and promote sustainable use of terrestrial ecosystems sustainably manage

The Company actively organizes staff activities such as fun sports meetings to help employees alleviate work-related stress and relieve stress. forests combat desertification and halt and reverse land degradation and halt biodiversity loss

The Company adheres to the concept of green development practices ecological protection commitments through the construction

Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all of green mines and active participation in the Yangtze River Protection Initiative achieving a harmonious balance between ecological

The Company is committed to building a scientific systematic and efficient training system offering tailored training programs for employees at all levels to and economic benefits.achieve self-improvement.The Company has established a sound IT-based training system and laid a solid foundation for its high-quality development by setting up a training school Conserve and sustainably use the oceans seas and marine resources for sustainable development

cultivating a team of lecturers and carrying out university-enterprise cooperation.The hydropower station fully implements ecological water discharge projects prioritizes ecological water discharge by creating

discharge outlets at dams channels and river barriers to protect the ecological environment.Achieve gender equality and empower all women and girls The Company launches the Yangtze River Protection Initiative comprehensively promoting the five major projects of "shutdown

The Company actively builds and maintains a diverse and equal atmosphere pays special attention to the protection and promotion of women's rights and interests transformation relocation pollution control and restoration".emphasizes equality between men and women and equal pay for equal work and ensures that female employees enjoy full protection of their rights and interests in

the course of their work preventing any form of infringement and discrimination. Take urgent action to combat climate change and its impacts

The Company sets up a Carbon Emission Management Leading Group actively carries out carbon emission verification and training

related to carbon management identifies risks and opportunities to address climate change and builds up a comprehensive risk

Ensure availability and sustainable management of water and sanitation for all identification assessment supervision and management process on the basis of which the Company formulated a work program for

energy saving and carbon reduction. During the Reporting Period the Company and its 8 subsidiaries were included in the Hubei

The Company continuously optimizes and upgrades wastewater treatment and management strategies to effectively reduce pollutant emissions during the provincial carbon market and 2 subsidiaries were included in the national carbon market;

production process. During the Reporting Period industrial wastewater met applicable standards before discharge. The Company improves the level of product greening through measures such as optimizing the energy structure and promoting clean

energy and strives to reduce the Company's carbon emissions and contribute to global efforts to address climate change.Ensure access to affordable reliable sustainable and modern energy for all

Ensure sustainable consumption and production patterns

The Company sets annual energy-saving and emission reduction goals assigns responsibilities to production units and continuously tracks the achievement

of these goals. The Company establishes a quality management system covering the whole lifecycle of products signs the Commitment to Quality

The Company has established an Energy Conservation Leading Group implements energy-saving standards and conducts energy audits. Through Management Target with each responsible unit actively carries out the system certification and reaches the qualified delivery of the

energy-saving technological renovations process optimization substitution of energy-saving equipment and use of renewable energy the Company products through quality training and quality inspection management measures;

improves energy utilization efficiency. The Company adheres to the information security management principles of "full participation prevention first continuous improvement

and compliant operation" and strengthens information security and privacy protection capabilities through classified information

Promote sustained inclusive and sustainable economic growth full and productive employment and decent management and information security training.work for all

The Company establishes and improves the tax management system and pays taxes in accordance with applicable laws and regulations to support the Make cities and human settlements inclusive safe resilient and sustainable

government in promoting economic growth; The Company develops a quantitative system to manage and monitor tail gases establishes a tail gas treatment system to effectively reduce the

The Company builds a fair and reasonable salary and benefits system as well as a scientific performance assessment mechanism to fully stimulate employees’ negative impact of tail gases generated by production processes on the surrounding environment. During the Reporting Period major exhaust

enthusiasm and innovation promote personal growth help to achieve the Company's strategic and operational goals and lay a solid foundation for the pollutants such as nitrogen oxides and sulfur dioxide were discharged in compliance with relevant standards;

long-term development of the Company; The Company develops a dedicated waste management system selects different treatment methods based on the nature of waste and ensures

The Company implements an employee stock ownership plan grants employees equity stimulates their potential strengthens the talent base enhances that the treatment process is environmentally safe to reduce environmental and health risks.employees' sense of belonging and responsibility and provides impetus for the steady development of the Company.Build resilient infrastructure promote inclusive and sustainable industrialization and

foster innovation Reduce inequality within and among countries

The Company establishes a Technological Innovation Leading Group improves the R&D and innovation system continuously enhances The Company adheres to equality and inclusiveness firmly opposes any form of discrimination and is committed to building a diverse equal and inclusive

independent R&D capability and explores new paths of university-enterprise cooperation. During the Reporting Period the Company workplace environment ensuring that every employee is treated equally.invested RMB 1.188 billion in R&D and achieved 3 major technological innovations.

23 242024 Environmental Social and Governance (ESG) Report

Governance Framework for Sustainable Communication with Stakeholders

Development

Adhering to the principle of paying great attention to the opinions of stakeholders and on the basis of actual needs Xingfa Group

has formulated and distributed questionnaires to widely listen to the voices of stakeholders. We also built a regular communication

In active response to the call for sustainable development Xingfa Group has integrated the ESG (Environmental Social and Gover- channel and join hands with all parties to promote the sustainable development of the Company.nance) philosophy into corporate strategic plans. The Company continuously optimizes management systems in the dimensions of

environmental protection social responsibility and corporate governance and builds a complete and scientific organizational

structure. We also revised the Implementation Rules of the Development Strategy Committee under the Board of Directors which

clarifies the departments at all levels and their responsibilities to ensure the implementation of relevant measures. This promotes the Category of Stakeholders Demands and Expectations Communication and Response

high-quality development of the Company and contributes solidly to the sustainable development of society and the environment.Standardized Operation Respond to relevant policies

Lawful Tax Payment Disclose information

Business Ethics and Anti-corruption Conduct supervision and inspection

Government and Regulatory

Agencies

Decision-making

Level Determine ESG strategic goals; review and approve major ESG

Board of Directors matters and annual reports and monitor the progress of goals. Win-win Cooperation Create a responsible supply chain

Contribution to Industry Development Strengthen industry exchanges

Suppliers and Partners

Study and provide suggestions on major issues affecting the

long-term development of the Company strategy significant invest-

Decision-making ment and financing asset management and capital operations;

Level Protection of Shareholders’ Rights and Interests Improve business performance

Development Strategy Study the Company’s ESG strategic planning guide the implementa- Risk Management Enhance internal control levels

Committee tion of the ESG strategy define short/medium/long-term goals Improvement of Corporate Governance Improve information disclosure

supervise work progress evaluate implementation effectiveness and Investors and Shareholders

provide guidance and suggestions and review relevant ESG

documents.Compensation and Benefits Enhance compensation and benefits

Health and Safety Raise employee satisfaction

Management Coordinate and implement ESG work establish and improve the ESG Employees Employee Promotion Improve the training and promotion mechanism

management system and ESG risk management system develop an ESG

ESG Office indicator system and clarify management responsibilities organize and

supervise ESG work in departments and prepare the annual ESG report.Smooth Communication Channels Strengthen product quality and service

Product Quality Assurance management

Develop departmental ESG work plans supervise and evaluate Protection of Customers’ Rights and Interests Protect rights and interests of customers

Executive Level Customers

progress and results assist in managing ESG risks and opportunities

Functional Departments and communicate with stakeholders and respond to ESG demands

Subsidiaries

establish an ESG information database and regularly report to the

management.Improvement of People’s Livelihoods

Support rural revitalization

Rural Revitalization

Public Welfare and Commu- Conduct public welfare activitiesPublic Welfare and Charity

nity Organizations

25 262024 Environmental Social and Governance (ESG) Report

Management of Material Topics Topic Analysis Results

In accordance with the assessment methods stated in the domestic and international disclosure standards such as the Shanghai Stock Based on the returned questionnaires Xingfa Group conducts an empirical analysis of material topics. Topics are prioritized and

Exchange Self-Regulatory Guidelines for Listed Companies No. 14 - Sustainability Report (for Trial Implementation) the GRI 3: Material analyzed from the dimensions of "impact materiality" and "financial materiality" to form a matrix of material topics.Topics the European Sustainability Reporting Standards (ESRS) the International Financial Reporting Sustainability Disclosure

Standards No. 1 - General Requirements for Disclosure of Sustainability (IFRS IFRSS1) Xingfa Group introduces the analysis perspec-

tive of impact materiality and financial materiality to identify and assess material topics in the following steps:

Material Topic Matrix of Xingfa Group

01 Learn about the company background Protection of Employees' Legal Rights and Interests Occupational Health and Safety

Training and Development Safety and Quality of Products and Services

Identify impacts risks and opportunities based on global trend analysis industry analysis and business

model analysis. Contribution to Society Innovation-driven Development

Rural revitalization Energy Utilization

Circular Economy Pollutant Emissions

Opportunities in Clean Technology Supply Chain Security

02 Conduct preliminary issue screening

Establish a pool of sustainability-related topics based on relevant standards.Anti-Commercial Bribery and Anti-Corruption Environmental Compliance Management

03 Assess the materiality of issues Anti-Unfair Competition Waste Disposal

Data Security and Customer Privacy Protection Response to Climate Change

Impact Materiality Assessment: sort out the impact of each topic on the external environment and conduct Ecosystem and Biodiversity Protection Water Resource Utilization

research and analysis of stakeholders through questionnaires.Financial Materiality Assessment: Assess the risks and opportunities of each topic and identify topics with

financial materiality by considering factors such as impact and dependency and based on the expert

judgment and the list of risks.Financial Materiality for Xingfa Group High

04 Confirm material topics

Topics with Impact Materiality Topics with both Financial Materiality

Rather than Financial Materiality and Impact Materiality

Formulate a list of topics with both impact materiality and financial materiality and disclose them in the

report according to their materiality.Topics Without Financial Topics with both Financial Materiali-

Materiality or Impact Materiality ty Rather than Impact Materiality

2728

High Materiality of Economic Social and Environmental Impacts Low2024 Environmental Social and Governance (ESG) Report

Guidance for Disclosure and Practice of Material

Topics

Material Topics Risk Opportunities Corresponding Section Material Topics Risk Opportunities Corresponding Section

Changes in environmental protection

regulations may lead to penalties if the Stricter energy policies fluctua

Company fails to adapt in a timely The Company can attract more tions in energy prices or The Company may optimize

Environmental consumers and partners and enhance Circular Economy: manner. In addition increasing Circular Economy: non-conforming raw materials energy management systems to

Compliance corporate image by responding to Energy Utilization Building a Shared investment in environmental protec- Building a Shared may affect product quality reduce energy consumption and

Management Ecological Futuretion funds and technological upgrades policies and actively participating in Ecological Future stability leading to increased increase the use of clean energy.may increase operating costs or environmental protection activities. operating costs.expose the Company to the risk and

pressure of technological upgrade

failures.Long-term exposure to raw

The Company may enhance Social Responsibil

materials may increase the risk of

Improper disposal of hazardous waste Occupational automated and intelligent ity Fulfillment: occupational diseases while

can pollute soil and water bodies and Proper waste disposal can Circular Economy: Health and Safety production and strengthen Co-creating a improper operation may also

Waste Disposal delays in handling general waste improve the Company's image and Building a Shared occupational health management. Better Futureinduce occupational health risks.affect the environmental sanitation of increase influence. Ecological Future

plant areas.The Company may participate in

Safety and Quality Innovation and Constant pursuit of product the formulation of industry

Quality Improve

Through effective control of pollut of Products and quality may bring additional standards and take other actions

Equipment failure or mishandling may ment: Driving

Pollutant ant emissions the Company can Circular Economy:

Services financial and human resource to enhance corporate influence

result in non-compliant pollutant Industrial

meet customers' social responsibility Building a Shared costs. and consolidate position in the Emissions discharges and affect the Company's Upgrades.requirements and enhance market Ecological Future industry.reputation.competitiveness.The Company may strengthen

Innovation and

cooperation and focus on

Factors such as high R&D costs Quality Improve

The development of electric Innovation-driven breakthroughs in key technologi

Natural disasters caused by climate and long R&D cycles lead to an ment: Driving

vehicles and the energy storage Development cal bottlenecks to enhance

change such as extreme weather and increase in operating costs. Industrial

Response to sector drives the demand for market expansion and increase

rising sea levels as well as stricter Circular Economy: Upgrades.Climate Change phosphorus chemical products; operating income.policies and shifts in market prefer Building a Shared

and breakthroughs in green

ences pose physical and transition Ecological Future

low-carbon technologies can

risks to the Company potentially

enhance competitiveness and

increasing operating costs.open up new markets. Some raw materials are affected The Company may enhance the Innovation and

by safety and environmental

Supply Chain level of digital operations Quality Improveregulations as well as weather

Security optimize inventory management ment: Driving and transportation factors

As the Company has high require and improve operational Industrial

Water Resource The Company may increase R&D of Circular Economy: resulting in production interrupments for water quality natural efficiency. Upgrades.Utilization recycled water technologies to Building a Shared tions and order delays.disasters may affect the stability of

reduce dependence on fresh water. Ecological Future

water supply.

29 302024 Environmental Social and Governance (ESG) Report

Party Building Leadership

Xingfa Group has always attached importance to Party building and thoroughly implemented the guiding principles of Party Building

the 20th National Congress of the Communist Party of China and the Third Plenary Session of the 20th CPC Central

Committee. The Company remains steadfast in arming minds and guiding practice with the advanced theories of the

Party. We closely integrate Party building with corporate development strategies corporate culture construction and Xingfa Group attaches great importance to education for enhancing Party consciousness. Through multiple collective study sessions

production and operation management. This effort continuously strengthens the cohesion and centripetal force of and lectures the Company continuously helps Party members and cadres deepen their understanding of Party theories and

Party organizations improve the quality of Party members and ensure that Party building becomes an important disciplines. To ensure orderly progress in study and education the Company formulated the Work List for Party Discipline Learning

guarantee for the Development of the Company. and Education of Xingfa Group which clearly defines learning content and objectives to strengthen the political literacy and

consciousness of Party members.Learning of the Xibaipo Spirit Case Study

Party Organization

Construction On May 22 2024 the Company organized 50 management

personnel to visit Xibaipo gaining an in-depth understanding

of its historical significance as the last rural command post

The Party Committee of the Company continuously strengthens and improves before the liberation of China and the revolutionary spirit it

Party building in alignment with actual business needs. Each year based on fostered: courage to fight reliance on the masses scientific

adjustments to departments and subsidiaries the Company flexibly optimizes construction modesty and prudence.and adjusts primary Party organizations. In Party building the Company strictly

complies with laws regulations and relevant systems as well as rules and

policies ensuring the standardization and institutionalization of Party building

work.As of the end of the Reporting Period there were 5 secondary Party commit-

tees under the CPC Yichang Xingfa Group Committee. These 5 secondary Celebration of the 103rd Anniversary of the CPC and July 1st Commendation Conference Case Study

Party committees oversee a total of 70 Party branches which provide a solid

organizational foundation for the Company’s Party building work and ensure

the thorough and effective implementation of the Party’s policies within the On June 28 2024 Xingfa Group celebrated the 103rd anniver-

Company. sary of the founding of the Communist Party of China (CPC) and

the "July 1" commendation meeting.The meeting honored 4 "Red Flag Branches" 1 "Model Secre-

tary" 3 "Party Affairs Masters" and 50 "Communist Demonstra-

tion Posts" to set examples and encourage all Party members to

keep striving forward. Additionally a cautionary film was

Key Performance screened to remind Party members and cadres to remain

vigilant and uphold bottom-line thinking.New Probationary Party Members: 22 Persons;

Probationary Members Granted Full Party Membership: 39 Persons.

31 322024 Environmental Social and Governance (ESG) Report

Support for the Company in Building Harmonious Labor Relations Case Study Governance through the General Meeting of

On May 24 2024 the Third Party Branch of the Yichang Shareholders Board of Directors and Super-

Intermediate People’s Court together with the Party Branch of

Xingfa Group and the Comprehensive Party Branch of the visory BoardYichang Park carried out a Party Day event themed “Support-ing Enterprises in Building Harmonious Labor Relations” in the

Yichang Materials Industrial Park. Governance Structure

The event covered activities such as visiting the new materials Xingfa Group is committed to building an efficient and transparent governance system. In strict compliance with the Company Law

industrial park renewing the Party membership oath learning of the People's Republic of China (hereinafter referred to as the "Company Law") the Securities Law of the People's Republic of China

the new content of the Regulations on Disciplinary Actions of (hereinafter referred to as the "Securities Law") the Governance Code for Listed Companies and other laws and regulations the

the Communist Party of China and explaining the norms of Company continuously optimizes the Articles of Association the Rules of Procedure of the Board of Directors and other internal

labor and personnel management to deepen cooperation management systems and defines the specific responsibilities of the General Meeting of Shareholders the Board of Directors the

through “Party Building + Legal-Enterprise Integration” and Supervisory Board the Management Team and various departments to continuously improve the governance structure and lay a

provide strong support for the long-term development of solid foundation for the long-term development of the Company.Xingfa Group.Governance Structure

General Meeting of

Shareholders

In addition the Company also emphasizes the importance of cautionary education. Through warning meetings and the work on party

conduct and clean governance Party members and cadres are constantly reminded to stay alert and firmly uphold moral and ideolog-

Supervisory Board Nomination Remuneration and ical integrity. Assessment Committee

Board of Directors Audit Committee

Development Strategy Committee

Management

General Meeting of Shareholders

To safeguard shareholders' rights and interests the Company revised the Rules of Procedure for the General Meeting of Shareholders

during the Reporting Period. This clarified the responsibilities and authority of the General Meeting of Shareholders enabled the

Cautionary Education Work on Party Conduct and Clean Governance General Meeting of Shareholders to exercise its powers in accordance with applicable laws and regulations and protected the

interests of both the Company and its shareholders. The procedures for convening holding and proposing the General Meeting of

Shareholders comply with the Company Law the Articles of Association and the Rules of Procedure for the General Meeting of

Shareholders as well as other relevant regulations.Key Performance Xingfa Group emphasizes equal treatment of all shareholders ensuring that all shareholders especially minority shareholders enjoy

equal status and can fully exercise their rights. The Company holds the General Meeting of Shareholders in a physical location and

During the Reporting Period offers a secure economical and convenient online voting method to facilitate shareholder participation in the meeting. For significant

12 matters affecting the interests of minority investors the votes of small and medium-sized investors are counted separately which the Theoretical Study Center Group under the Party Committee of Xingfa Group organized effectively protects the legitimate rights and interests of minority shareholders.

centralized learning sessions and

studied the “first-topic” at 12 meetings of the Party Committee. K关ey键 P绩erf效ormance

General Meeting of Shareholders Convened: 4 Sessions;

Proposals Reviewed and Approved: 18 Items.

33 342024 Environmental Social and Governance (ESG) Report

Board of the Directors Independence of the Board of Directors

The Board of Directors as the core decision-making body of the daily operation has been shouldering crucial responsibilities in the

development of the Company. To further enhance the standardization of operations and the soundness of decision-making the Xingfa Group has formulated the Procedures for the Work of Independent Directors to ensure that independent directors can

Company revised the Rules of Procedure of the Board of Directors during the Reporting Period. The revision improved the meeting perform their duties. During the Reporting Period 7 independent directors participated in all decision-making of the Company in

procedures decision-making processes and the rights and duties of directors ensuring that the Board of Directors follows estab- strict accordance with applicable regulations and expressed objective and independent opinions on the relevant matters considered

lished guidelines when carrying out strategic planning investment decisions and management supervision. This effort ensures that by the Board of Directors to safeguard the legitimate rights and interests of the Company and all shareholders.each decision is fully discussed and carefully considered effectively guaranteeing that the Company’s operations move forward

steadily in the right direction.K关ey键 P绩erf效ormance Board Diversity

Meetings of Board of Directors Convened: 9 Sessions;

The Company adheres to the internationally recognized ESG governance guidelines and takes board diversity as a core tool to

Proposals Reviewed and Approved: 56 Items; Average Attendance Rate: 100%. improve the modern corporate governance system and actively promotes the construction of a diversified Board of Directors in

terms of gender age and educational background. The Board of Directors consists of 13 directors including 1 female director

accounting for 7.69% of the total. The members of the Board of Directors have deep professional expertise and rich practical experi-

ence covering a wide range of industry sectors including: financial management accounting investment safety and environmental

protection metallurgy chemicals etc.The Board of Directors has set up three specialized committees: the Audit Committee the Nomination Remuneration and Assessment

Committee and the Development Strategy Committee and formulated corresponding implementation rules to enhance the profes-

sionalism and soundness of decision-making. Each specialized committee has clear responsibilities and works collaboratively to

provide strong support for the Company’s strategic decision-making ensure the precise implementation of all company decisions

and contribute to the Company’s sustainable development. Board Diversity and Composition

Number of Number of Proportion of Director Members Independent Independent Core Responsibilities Gender Persons Position PersonsDirectors Directors

Propose hiring/replacement of auditor

Male 12 Non-Independent 6

supervise the implementation and commu- Directors

nication of internal and external auditing

Independent

Audit Committee Independent 5 Persons 5 Persons 100% system review financial information Female 1 7

Directors Directorsproject investment and internal control

system and deal with other related matters

authorized by the Board of Directors.Recommend the size and composition of

the Board of Directors based on the

realities of the Company study and recom-

mend candidates for directors and manag- Age Persons Education Background Persons Ethnicities Persons

Nomination Remuner-

Independent ers formulate remuneration plans conduct ation and Assessment 100%

Directors 5 Persons 5 Persons performance assessment supervise the 40 (inclusive) to 50 Committee Doctoral

implementation of the remuneration (exclusive) years old

2

degree 2 Han Nationality 10

system and deal with other related matters

Master’s

authorized by the Board of Directors. 50 (inclusive) to 60 66 6 Miao Nationality 2

(exclusive) years old degree

Study the Company’s long-term strategy

Bachelor’s

major investment and financing plans and 60 years old or above 5 Degree 5 Tujia Nationality 1

significant matters affecting development

Development Strategy provide recommendations supervise their

Committee Chairman 7 Persons 5 Persons 71% implementation and handle other related

matters authorized by the Board of

Directors.

35 362024 Environmental Social and Governance (ESG) Report

Supervisory Board Remuneration Plan for Directors Supervisors and Officers

During the Reporting Period the Company revised the Rules of Procedure of the Supervisory Board to strengthen the supervisory Determination Basis

function of the Supervisory Board clarify its composition deliberation and voting procedures. The Supervisory Board consists of 5

supervisors including democratically elected employee representatives to ensure fair transparent and efficient supervision.The remuneration of directors and supervisors is determined based on the 2024 Allowance

Program for Directors and Supervisors adopted by resolution at the 2023 Annual General

Meeting of Shareholders;

K关ey键 P绩erf效ormance

The compensation of officers is based on the 2024 officer salary assessment plan approved

8 by the Board of Directors and the Regulations on the Management of the Chairman's Incen-Meetings of the Supervisory Board Convened: Sessions; tive Fund.

Proposals Reviewed and Approved: 26 Items; Average Attendance Rate: 100%.Actual Payment

Allowances for directors and supervisors are paid by the Company on a monthly basis;

The remuneration of officers comprises base salary performance-based pay and

Management of Remuneration for Directors outstanding contribution awards. The base salary is fixed and paid monthly while perfor-mance-based pay and outstanding contribution award are paid after evaluation by the

Supervisors and Senior Management Nomination Remuneration and Assessment Committee based on the work performance of the senior management team in 2024.In accordance with applicable laws and regulations such as the Company Law of the People's Republic of China by

reference to the provisions of the Articles of Association and in conjunction with the actual operating conditions the

Nomination Remuneration and Assessment Committee conducted a comprehensive and objective performance Remuneration of Directors Supervisors and Officers

assessment of directors supervisors and officers in accordance with the established performance assessment (Current and Former):

standards and processes and reasonably determined the remuneration of directors supervisors and officers to ensure

the fairness and effectiveness of the incentive mechanism.RMB 24635800

37 382024 Environmental Social and Governance (ESG) Report

Compliant Operations

Compliance Management Measures

Xingfa Group always integrates risk management and compliance operation deeply into the core of enterprise devel- In accordance with the Measures for Inspection Evaluation and Assessment of Internal Control and other systems Xingfa Group

opment builds an all-round risk management and control system keenly observes all risks in fields such as market vigorously promotes compliance management regularly conducts the comprehensive reviews of operational processes from

operation and finance and formulates countermeasures in advance to effectively prevent risks. The Company actively financial revenue and expenditure to business operations and from internal approvals to information disclosure with all processes

fosters a strong compliance culture so that compliance awareness permeates every decision and business process included in the scope of rigorous assessment. The Company continuously strengthens training on laws and regulations and enhances

guaranteeing that the Company's operations are legal and compliant. employees' compliance awareness and legal literacy to safeguard the long-term development of the Company.During the Reporting Period no compliance risks or internal control deficiencies were shown in the internal control evaluation report.Training on the Revision of the Company Law Case Study

Compliance Management System

To build a scientific compliance management system and comprehensively On July 15 2024 Xingfa Group held a training session on the

improve the Company’s compliance governance capacity the Company has Revision of the Company Law to deepen state-owned enterprise

formulated a series of regulations including the Compliance Management reform and compliance to support the high-quality development

System the Compliance Evaluation Control Procedures and the Contract of the Company. The training aimed to help employees improve

Management System etc. Upholding the requirement of "business manage- their understanding and application of the latest regulations

ment must cover compliance management" the Company implements employ- enable them to better grasp the direction of reform enhance

ees' compliance responsibilities. The Company passed the certification of compliance awareness and support the Company in achieving

GB/T35770-2022/ISO37301:2021 Compliance Management System. high-quality development while adhering to laws and regula-

Compliance Management System Certificate tions.Compliance Management PolicyThe Company firmly establishes the philosophy that “the compliant operation and the adherence to laws and regulationsare everyone’s responsibility” actively builds a compliance culture of lawfulness and integrity across the entire organi- Training on Laws and Regulations

zation and continuously improves the compliance management system to safeguard the high-quality development of

the Company.Indicator Unit 2022 2023 2024

Responsibilities of the Compliance Committee Training on Laws and Regulations (Sessions) Times 19 23 22

Duration of Training on Laws

Confirm the compliance management strategy and define compliance management objectives. and Regulations Hours 29 55 64

Establish and improve the compliance management system of the Company and review basic compliance management Number of Participants in

Person-times

systems procedures and major management plans against compliance risks. Training on Laws and 1432 1958 2265

Regulations

Read reports on compliance management and provide guidance supervision and evaluation of compliance manage- Number of Legal Personnel

ment work. Participating in Training Persons 20 19 19

39 402024 Environmental Social and Governance (ESG) Report

Risk Management System

Risk Management Process

In strict compliance with the Basic Standard for Enterprise Internal Control the Articles of Association and other laws regulations and

internal systems the Company formulates the Risk Management System establishes a comprehensive and strict risk management

system with the Internal Control Department responsible for organizing coordinating guiding and supervising the risk management

work of all departments and subsidiaries. Through risk identification assessment and response the risk levels are clarified and corre- Information Each department and subsidiary continuously collects risk management information

sponding response strategies are developed and implemented for different risks ensuring the achievement of the Company's overall Collection establishes risk databases formulates criteria for identifying major risks and submits

objectives. them to the Internal Control Department for approval.Risk Based on the business scope of the Company identify risks including strategic risks Risk Management System Framework Assessment financial risks operational risks market risks legal risks and IT risks;

Adopt a combination of qualitative and quantitative methods analyze and prioritize

identified risks according to factors such as the likelihood of occurrence and the

extent of impact to determine the key areas of focus and risks to be prioritized for

Organize and coordinate the risk management of various departments and subsidiaries;

control.Assess major risks and suggest improvements and supervise implementation after approval;

Internal Control Provide guidance and support for risk assessments in departments and subsidiaries;

Department Update and maintain the Company’s major risk information database; Develop or revise risk management solutions for risks before during and after the

Supervise and inspect the risk management of departments and subsidiaries and provide Solutions

event in accordance with the risk management strategy.recommendations on assessment rewards and punishments.Act as the first responsible person for risk control perform risk control and mainly under-

take the following responsibilities:

Establish basic risk management processes maintain timely accurate and complete

Heads of Collect information build a risk information base and update it on an ongoing basis;

Improvement and

information communication with relevant units and conduct regular self-inspection

Departments Formulate criteria for identifying major risks sort out major risks and report them to the

Supervision

and monitoring and evaluation to ensure continuous improvement in risk manage-

and Subsidiaries Internal Control Department for confirmation; ment.Conduct risk management assessments and propose countermeasures and optimization

plans;

Implement major risk management solutions to ensure that all measures are properly

executed.Risk Management Measures

To strengthen risk management Xingfa Group conducts risk assessment of each business process through internal audit analyzes

risk points and provides a scientific basis for response strategies. In addition the Company focuses on raising employees' awareness

Risk Management Process of risk actively offers training on risk management and enhances employees' understanding of and ability to respond to risks there-

by building a solid and comprehensive risk management system.The risk management process covers key steps such as information collection risk assessment strategy and solution formulation and

improvement and supervision. Through systematic collection of relevant information potential risks are accurately assessed and

scientific and reasonable countermeasures and solutions are then formulated. Efforts are made to continuously improve the risk K关ey键 Pe绩rfo效rmance

management and supervision process to ensure that risks are effectively controlled.Financial Audit Reports Completed: 44 Copies

Engineering Project Settlement Audit Reports Completed: 523 Copies

41 422024 Environmental Social and Governance (ESG) Report

Constitution Publicity Week Case Study Tax Team Building

From December 2 to 9 2024 all units (departments) under Xingfa Group actively carried out activities to promote and study Xingfa Group regularly organizes finance and tax knowledge sharing sessions to enhance the compliance awareness and professional

the Constitution including: organizing employees to watch the special program of “2024 Annual Rule of Law Figures” capabilities of tax management personnel and has established a tax-sharing center with clear divisions of responsibilities. In addition

holding legal knowledge competitions posting promotional slogans and using new media platforms to learn and forward we have established a communication mechanism strengthened internal exchanges and emphasized cross-departmental collabora-

promotional materials. Specialized training on laws and regulations was provided to marketing and trade personnel tion to ensure that the tax work is coordinated with the overall operation and to effectively reduce tax risks.effectively improving the legal awareness and business capabilities of all employees.Annual Training on Finance Case Study

In September 2024 Xingfa Group held the 2024 Annual Training

on Finance explaining the latest financial policies accounting

standards and tax management to help employees improve

their abilities in financial analysis budget preparation and tax

compliance management thus promoting the stable develop-

ment of the Company's finances.Tax Management Protection of Shareholders’ Rights

Xingfa Group attaches great importance to tax management formulates and regularly optimizes the Tax Risk Management Measures and Interests

and other related systems clarifies tax obligations and responsibilities closely monitors changes in tax policies and adjusts in a timely

manner to address potential risks ensuring the standardization of tax operations.Information Disclosure During the Reporting Period

Tax Management System Xingfa Group has formulated the Information Disclosure Management the Company received an excellent rating for

System which aims to ensure the accuracy and timeliness of the information disclosure work for the 2023-2024

The Company utilizes the electronic VAT invoice reform by building a direct connection platform with the General Administration information disclosed by the Company to the public thereby protect- period from the Shanghai Stock Exchange (Top

completing the intelligent data link between the ERP system and the tax system promoting the digitalization and intelligence of ing the right to know of the majority of investors and stakeholders and 15% of A-shares)

financial management. The tax system functions are optimized to support automatic declaration of multiple taxes data verification maintaining the fairness and transparency of the capital market. In and the Company Secretary received a 5A

and a tax-sharing center is established to improve processing efficiency integrate data to support decision-making strengthen risk addition the Company has established the Internal Reporting System rating from the China Association for Public

monitoring effectively reduce tax risks and drive the overall digital transformation of the Company. for Material Matters which stipulates that in the event of a material Companies (Top 3% of A-shares)

matter such matter must be reported internally to the Company and

then disclosed externally after internal review thus strengthening as well as its first award for the Excellent

internal information management and external transparency. Practice Case from the China Association for

Public Companies (Top 10% of A-shares).K关ey键 P绩erf效ormance

Periodic Reports Disclosed: 4 Copies; Interim Announcements: 81 Copies

Penalties for violations in information disclosure: 0 cases

Direct Connection Platform Tax Sharing Platform

43 442024 Environmental Social and Governance (ESG) Report

Investor Relations Management Shareholder Return

To strengthen the close relationship between the Company and its investors improve the quality and efficiency of information disclo- Xingfa Group attaches great importance to shareholder returns. Under the guidance of the Articles of Association the Company has

sure and promote accurate recognition of the Company’s value in the capital market Xingfa Group establishes the Investor Relations built a fair and transparent profit distribution system thereby implementing a reasonable profit distribution plan to respond to share-

Management System. By standardizing the organization and execution of investor relations activities the Company ensures that it can holders' trust and support with tangible actions creating more stable and sustainable returns for shareholders.promptly accurately and comprehensively communicate key information to investors such as its strategy business results and

development prospects. This in turn effectively enhances investors' trust and confidence in the Company and lays a solid foundation

for the Company’s stable development in the capital market.Key Performance 2022 2023 2024*

As a result of its continuous efforts and outstanding performance in investor relations management the Company has won multiple

prestigious awards.Cash Dividend per Share (RMB) 1.00 0.60 1.00

Outstanding Board 2024 Excellent Practice Case of

2024 Golden Quality 2024 Elite Board Annual Most Influential

Secretary Award for Market Value Management of

Award for Outstanding Secretaries by Cailian Enterprises List - Most

Investor Relations of Listed Companies in Hubei

Board Secretary Press Investment Value Award

Listed Companies in China Province Total Cash Dividend (Tax Inclusive) (in RMB 10000) 111167.07 66195.26 110325.51

Awarding Authority: Awarding Authority: Awarding Authority: Awarding Authority: Awarding Authority:

Shanghai Securities News Securities Times Cailian Press Cailian Press Hubei Daily

Proportion to Net Profit Attributable to Shareholders of the

Listed Company in Consolidated Financial Statements (%) 19.00 48.01 68.89

2024 Best Governance

2024 Frontier *Note: This proposal has been reviewed and approved at the 7th Session of the 11th Board of Directors and still requires approval Award for Listed Excellent Case of ESG Model of Excellence in

Breakthrough Award Companies Practices Investor Relations from the General Meeting of Shareholders.Awarding Authority: Awarding Authority: Awarding Authority: Awarding Authority:

Valueonline Valueonline Chinese Securities Journal Chinese Securities Journal During the Reporting Period the stock price of the Company increased by 22.45% in 2024 which is 24.57% and 9.78% higher than the

Wind Chemical Index and the Shanghai Stock Exchange Index respectively.Communication with Investors Performance Exchange Meeting Case Study Business Ethics

During the Reporting Period the Company

actively engaged in investor relations activities

such as brokerage strategy meetings online On August 20 2024 Xingfa Group held an

exchanges and results briefing sessions which interim results exchange meeting and

effectively strengthened communication with explained the operating results and Xingfa Group strictly adheres to regulations such as the Company Law and the Anti-Monopoly Law of the People's

investors and laid a good foundation for the financial highlights of the first half of the Republic of China upholds business ethics and follows the principle of fair competition. By establishing and improving

Company's sustainable development. year to investors. Through online internal management systems strengthening employee legal education and professional ethics training and promot-

platforms the meeting enhanced interac- ing legal and compliant business activities the Company takes practical actions to fulfill its corporate social responsibil-

tion with investors answered investor ity set an industry example and contribute to building a healthy and orderly market environment.questions in detail and strengthened

investors' understanding and trust in the

Company.K关ey键 P绩erf效ormance Anti-Commercial Bribery and Anti-Corruption

Investor On-Site Surveys Received: 18 Times; Participants in the Survey: 100 Person-times The Company actively responds to the call for anti-commercial bribery and anti-corruption. In daily operations it signs integrity

Brokerage Strategy Sessions and Conference Calls Attended: over 100 Sessions; Performance agreements with business partners to clarify the integrity guidelines for both parties in business dealings establishing a strong

Briefings Held: 4 Sessions; integrity defense through practical actions. In addition the Company has set up multiple and accessible whistleblowing channels

ensuring smooth supervision and feedback paths and vigorously promotes the construction of an integrity culture allowing the

Investor Questions Answered: 114 Pieces; Investor Calls Received: over 500 Times awareness of integrity to permeate every corner of the Company. It strives to create a clean and positive business environment

ensuring the Company’s steady progress.

45 462024 Environmental Social and Governance (ESG) Report

Cultivation of Integrity Culture Disciplinary Education Case Study

To foster an atmosphere of integrity the Company and its subsidiaries have placed numerous integrity slogans in On July 15 2024 Xingfa Group organized the

locations such as office areas and factories and established integrity reading corners. Regular training activities are 2024 Cautionary Education Conference and

held using real case analysis and legal interpretations to help employees deeply understand the importance of Disciplinary Education Work Meeting. Through the

integrity in their work. In addition the Company regularly issues integrity reminders using both images and text to analysis of typical cases the Company reinforced

convey integrity concepts to employees strengthening integrity awareness through daily details and deeply embed- all employees' awareness of discipline and rules

ding these concepts into employees' hearts. solidifying the ideological defense line against

corruption and changes. The direction and key

K关ey键 P绩erf效 focus of disciplinary education were clarified to ormance

create a favorable atmosphere for the Company's

healthy development.Signing Rate of Integrity Agreement: 100%

Integrity Awareness Training for New Employees Case Study

On July 10 2024 Xingfa Group organized a collective

discussion on integrity in professional conduct for

newly hired university graduates. The aim was to

guide the new employees to establish correct values

and professional ethics emphasize the importance of

integrity in their work and provide a detailed expla-

nation of the Company’s integrity systems and

related regulations laying a solid foundation for

them to maintain good moral qualities throughout

their career at the Company.Whistleblowing Channels

The Company has set up multiple whistleblowing

Integrity Book Bar channels to allow employees and the public to easily Email: xfjtjiwei@163.com

report potential violations. It also takes a series of Tel.: 0717-2588616

confidentiality and protection measures to ensure Address: Room 812 No. 58 Gaoyang Avenue Gufu

the safety and legal rights of whistleblowers. Town Xingshan County Yichang City Hubei Province

China

Anti-Monopoly and Fair Competition

In strict compliance with the Anti-Unfair Competition Law of the People's Republic of China the Anti-Monopoly Law of the People's

Republic of China and other legal regulations Xingfa Group is committed to maintaining a fair and just market competition

environment. The Company resolutely opposes any form of monopoly behavior and ensures that there is no abuse of market

dominance or actions that limit or exclude competition in our business activities. We actively advocate for fair competition create

more value for consumers and industry partners through ethical business practices and quality services and jointly promote the

Integrity Slogans Integrity Reminders

prosperity and development of the market economy.

47 4802 CircularEconomy

Building a Shared

Ecological Future

SDGs Responded in this Chapter

Material ESG Topics Covered in this Chapter

□ Opportunities in Clean Technology Key Achievements in 2024

□ Response to Climate Change

□ Environmental Compliance Management □ Pollutant Emissions

□ Waste Disposal □ Energy Utilization

Total Investment in Total GHG Emissions: Indirect GHG

□ Water Resource Utilization □ Circular Economy Environmental Protection: 6.432 Emissions376 million tCO2e□ (Scope 2): Ecosystem and Biodiversity Protection RMB million Direct GHG Emissions

Total Energy Consumption: (Scope 1):

3.8631 2.56892036400 tce million tCO2e

million tCO2e

49 502024 Environmental Social and Governance (ESG) Report

Opportunities in Clean Technology

By-product and Waste Resource Utilization

Xingfa Group's opportunities in clean technology mainly come from three main directions: renewable energy materials Chemical enterprises produce large amounts of by-products and "waste water tail gas and solid waste" which can either be used as

circular economy and improvement of energy efficiency. valuable resources or discarded as waste. The park plans its industrial layout under the guidance of "circular development circular

utilization" leveraging the symbiotic coupling relationships between different products to build industrial chains and make full use of

"waste".In Xingfa Group's Yichang New Materials Industrial Park glyphosate and organic silicon form the most representative circular econo-

Renewable Energy Materials my chain. Glyphosate is a green ecological herbicide and during its production by-product methyl chloride is generated. This

by-product is transported via pipelines and can be applied to the production of organic silicon. The hydrochloric acid produced as a

by-product of organic silicon is all reused in the production of glyphosate. This cycle is also known as Xingfa's "virtuous cycles".Xingfa Group is actively involved in the renewable energy materials field. Its products have wide applications and cooperate with

many industry giants playing an important role in promoting the development of renewable energy.Field Field Introduction Main Measures Diagram of Circular Industry Chain in Yichang New Materials Industrial Park

Xingfa Group cooperates with photovoltaic giants such as

Xingfa Group’s silicone products can be LONGi Green Energy Technology Co. Ltd. and Tongwei Co. Salt (Sodium

used as sealing materials and packaging Chloride)

Photovoltaic Ltd. to provide silicone sealants for photovoltaic module

processes for solar photovoltaic panels

Materials packaging. The product (such as high-temperature vulca-

Silicon

improving the durability and efficiency Hydrochloric Acid nized silicone rubber) can withstand extreme temperatures Bleaching (By-product )

of the components directly supporting Powderand ultraviolet rays extending the component's lifespan to

the development of renewable energy. Methyl Chloride over 25 years and reducing the operation and maintenance Hydrogen Chloride Synthetic Hydrochloric Acid (By-product)

costs of photovoltaic power plants. Chlor-Alkali

Organosilicon

Glyphosate Monomer

In cooperation with Zhejiang Huayou Cobalt Co. Ltd. and

Expand the lithium iron phosphate (LFP) others the Company uses its own phosphate resources to Chloroace- Glycine

cathode material industry chain utilizing produce lithium battery materials with a planned capacity of tic Acid

Lithium Hydrochloric Acid phosphate chemical resources to serve 300000 tons/year of iron phosphate (Phase 1: 100000 tons/- (By-product)

Battery Calcium the electric vehicle battery market year to be put into production in 2024) and 300000 tons/year Chloride

Materials aligning with sustainable transportation of lithium iron phosphate (Phase 1: 80000 tons/year already Phosphorus

demands. constructed). The products are gradually being introduced to DimethylphosphiteTrichloride

leading domestic lithium battery companies.Flame Retardants

Yellow Electronic-grade Organosilicon

Building a Circular Economy Phosphorus Phosphoric Acid Products

Food-Grade Special

Phosphates

Xingfa Group follows the concept of "there is no absolute waste only resources placed in the wrong position" and according to the Phosphoric Acid

principles of "reduction reuse and resource utilization" supports technological innovation with a focus on efficient resource

recycling energy conservation and pollution reduction. This has formed a circular economy development model characterized by

"innovation in the cycle efficiency improvement in the cycle" covering the utilization of by-products and waste wastewater tail

gases and other fields.The Company has been recognized as a National Clean Production Demonstration Enterprise a National Demonstration Base for

Comprehensive Utilization of Low-Grade Phosphate Ore a Core Enterprise of the National Circular Economy Pilot Park and a Nation-

al Demonstration Enterprise for Resource Conservation and Environmental Friendliness.

5152

Phosphates (By-product)

Chlorine2024 Environmental Social and Governance (ESG) Report

In addition the Company has made a series of important breakthroughs in Wastewater Recycling Tail Gas Reduction and

the comprehensive utilization of phosphogypsum gradually overcoming and Utilization Control Utilization

industry challenges through technological innovation and industry-aca-

demia-research cooperation. In 2024 the Company continued to focus on

the resource utilization of phosphogypsum with a focus on advancing the

development of waste sulfuric acid recovery process packages and the By the end of the Reporting Period Xingfa Xingfa Group is actively promoting the comprehensive utilization of tail gas achieving efficient recovery of yellow phosphorus tail

construction of related facilities to further improve resource utilization Group had renovated pipelines built cooling gas which is used as a fuel for the production of products such as sodium tripolyphosphate and sodium hexametaphosphate as well

efficiency. In July 2024 the Company launched a pilot project for the prepa- towers collected and treated phosphorus-con- as for power generation. Additionally the tail gas phosphine produced from sodium hypophosphite is converted into phosphoric acid

ration a pilot-scale test of high-purity gypsum producing gypsum products taining surface water and closed-loop recycled for the production of flame retardants greatly enhancing the resource utilization level of tail gas. The Company has been carrying out

with a purity of ≥99% and whiteness of 85-90% reaching industry-leading industrial wastewater in all of its plants achiev- clean production technology renovations for yellow phosphorus at its Baisha River Chemical Plant Longma Phosphorus Industry

levels. In the future the Company will continue to center on technological ing near-complete industrial wastewater reuse Xiangyang Xingfa and Baokang Chufeng Chemical Plant. This initiative successfully addressed the yellow phosphorus exhaust

innovation deepen industry-academia-research cooperation and promote and zero liquid discharge. combustion issue in yellow phosphorus production enterprises effectively improving the environmental protection level of produc-

the industrialization of phosphogypsum comprehensive utilization technol- tion setting a new benchmark for industry development and leading the industry toward a green and clean direction.ogy contributing to the green and sustainable development of the industry.Pursuit of Higher Energy Efficiency

The clean production process for yellow phosphorus has been recognized for 12 consecutive

years as the national energy efficiency leader in key industries with the Ministry of Industry

and Information Technology promoting it as a typical experience throughout the industry.

53 542024 Environmental Social and Governance (ESG) Report

Response to Climate Change Strategy

Risk Duration Impact on Financial

The chemical industry as a key pillar of the national economy has become a major area for GHG emissions due to its Type Description of Risk of Impact Value Chain Impact Countermeasures

high energy consumption and high emissions during the process of economic development. As a member of the chem-

ical industry Xingfa Group is deeply aware of the significant responsibility it carries in terms of emission reduction. The

Company actively responds to the national "carbon peaking and carbon neutrality" goals continuously improving its Each production base and marketing

climate change governance framework and regards the "carbon peaking and carbon neutrality" goals as an important platform faces extreme weather Increase in Strengthen facility construction

guide for corporate development. These goals are deeply integrated into the Company's long-term strategic planning Acute conditions due to their geographical operating costs standards improve disaster

with the Company identifying and managing climate risks in accordance with its actual situation. Additionally the risks location including heavy rainfall and

Upstream

Short

operations and decrease in resistance and formulate emergen-

Company based on its operational conditions has set emission reduction targets in line with the development trends such as snowstorms in regions like Hubei term operating

extreme typhoons in Jiangsu and sandstorms downstream cy response plans to ensure supply of the chemical industry and is actively fulfilling its carbon reduction responsibilities contributing to the achievement revenue

weather in Xinjiang which can damage chain resilience.of carbon peak and carbon neutrality goals.facilities disrupt transportation and

affect production and sales.Long-term temperature increases may

Governance affect crop growth thereby impacting Increase in Chronic Long Operations Further reduce comprehensive the stability of the supply of biomass operating

Risks term downstream product costs

raw materials required for chemical costs

products.To further optimize carbon emission verification and compliance work improve carbon emission management and actively integrate

into the national carbon emission trading market Xingfa Group has established a Leading Group for carbon emission management.The Leading Group has an office responsible for the daily affairs of carbon emission trading. In addition the Leading Group has set As countries impose stricter carbon

up four working groups: the Verification Group the External Liaison Group the Trading Group and the Information Disclosure Group. emission and environmental protection

Each group has clear responsibilities and works collaboratively ensuring efficient and orderly execution of carbon emission Policies requirements companies may face Actively monitor policies and regula-

Increase in

trading-related tasks including carbon emission verification external communication market trading operations and information and changes in policies such as carbon taxes Long tions formulate carbon reduction Operations operating

disclosure. Regula and carbon emission quota restrictions. term plans optimizes production process-costs

tions For instance the chemical industry faces es and improve energy usage.During the Reporting Period to enhance employees' professional skills and capabilities in responding to climate change the Company stringent environmental protection

conducted training on carbon management covering professional knowledge such as carbon policy interpretation and carbon policies and carbon emission regulations.emission calculations.As the industry transitions to green and

low-carbon technologies if companies

fail to keep up with the pace of

Techno Increase R&D investment and

technological development such as Reduction in

logical collaborate with research institutions

falling behind in carbon capture Medium Operations Operating

Transfor and other companies to develop

utilization and storage (CCUS) term Revenue:

mation green and low-carbon technologies.technology new catalyst technology

and green chemical processes they may

face the risk of obsolescence.As consumer demand for green and

environmentally friendly products

Changes

increases if Xingfa Group does not Reduction in Strengthen market research adjust

in Long

adjust its product structure in time and Downstream Operating product structure and develop green

Market term

produce more green products that meet Revenue: and environmentally friendly

Demand

market demand it may lose market products.competitiveness.

5556

Physical Risk Transition Risks2024 Environmental Social and Governance (ESG) Report

Opportu- Duration Impact on Financial Metrics and Targets

nity Type Description of Opportunity of Impact Value Chain Impact Countermeasures

The Company has developed an energy-saving and carbon-reduction plan based on actual operations and long-term development

plans. The plan clearly defines the main objectives key tasks implementation paths for energy-saving and carbon-reduction

The government provides support

policies for the green and low-car transformations and supporting measures actively promoting the establishment of the Company's carbon-neutral management

bon industry such as subsidies and Actively apply for policy support system and implementing carbon reduction responsibility goals. During the Reporting Period the Company and its subsidiaries

Policy Medium Reduction in

tax incentives for companies using Operations and utilize policy benefits to carried out key green and low-carbon upgrade and transformation projects to achieve green and low-carbon transformation.Support term operating costs

renewable energy and green promote enterprise development.low-carbon technologies which can

help the development of enterprises.Project Project Content Construction Project Benefit Analysis

With the development of electric Name Start Time

vehicles energy storage and other

Growth in sectors the demand for lithium iron Expand the production capacity of

Medium Increase in Project for The project gradually upgrades and replaces

Market phosphate and other phosphochemi Downstream related products and increase

term operating income Upgrading and the plant's reduction motors using After the project is completed the annual

Demand cal products are growing rapidly market share. Transforming permanent magnet motors to replace gear 2024 power consumption is reduced by 540000

bringing market opportunities to Permanent reduction motors with an expected kWh.Xingfa Group. Magnet Motors replacement of over 30% within two years.In the process of green and low-car- The project uses sodium hypophosphite tail

bon technological innovation if it Comprehensive gas as raw material for production to expand

achives technological breakthroughs Reduction in Utilization downstream products of phosphines. The Project Benefits after Completion: The

Technological e.g. developing more efficient carbon Long Operations operating cost and Establish R&D centers attract Project of main construction includes: pretreatment 2024 phosphine tail gas can be comprehensively

innovation reduction technologies or new green term downstream increase in talent and encourage innovation. Phosphine Tail process cryogenic process high-pressure utilized to produce high-value-added products.products Xingfa Group can enhance operating income Gas synthesis process distillation process and

its competitiveness and explore new supporting plants and tank areas.markets.The project has been transformed from the

Project Benefits after Completion: The original

Sodium original 24 single reactors for raw material

Impact Risk and Opportunity Management 24 reaction kettles are transformed into 2 sets Hypophosphite addition reactions to 2 sets of vertical of continuous tower reducing equipment

Continuous circulating reaction towers to achieve

2024 power consumption; the annual power

Xingfa Group has built a comprehensive process for risk identification assessment supervision and management and adjusts it Process Reaction continuous reactions within the towers. The consumption is reduced by 1.7388 million kWh;

Technology main construction contents include 2 sets of

based on changes in the external environment and company business planning continuously optimizing risk response strategies to and the use of continuous reaction processes

Upgrade Project continuous reaction towers electrostatic

ensure that climate risk management aligns with the Company's overall strategy and provide strong support for achieving sustainable reduces raw material losses.demister tail gas fan etc.development goals.Yellow Optimize the yellow phosphorus production

Based on factors such as the geographical environment of the Company’s location business scope Phosphorus process by replacing coarse ore with

Identifi- Optimized concentrate renovating the phosphate ore Project Benefits after Completion: the CO2

cation and policy changes regularly update climate risk analysis scenarios to identify potential risks and 2023Low-Carbon screening equipment and adjusting process emissions is reduced by 8368 tons/year.opportunities caused by climate change. Raw Material parameters for production. The use of

Process Upgrade concentrated ore increases to 100%.Assess- Analyze the major financial impacts their duration and extent of each of identified risks and opportu-

ment nities.The Company actively carries out product carbon footprint certification and compiles product lifecycle reports. Through these

measures the Company can not only comprehensively understand the environmental impact of products at different stages of their

Each department and subsidiary regularly conducts self-assessments of climate-related risk and

Supervi- lifecycle but also identify key processes and potential optimization points providing a basis for developing improvement measures. opportunity management promptly identifying and improving risk deficiencies and submitting

sion Some of the Company's products are expected to reach industry benchmark levels through technological improvements and the

inspection reports to the Company’s Internal Control Department. application of green and low-carbon technological innovations.Manage- Formulate corresponding response measures based on the identification and assessment.ment

57 582024 Environmental Social and Governance (ESG) Report

Environmental Management

Indicator Unit 2024

Direct GHG Emissions (Scope 1) 10000 t CO2e 386.31 The main categories of pollutant emissions and waste generation of the Company include industrial wastewater

domestic sewage industrial tail gas and industrial solid waste generated in the production and office processes. In

Indirect GHG Emissions (Scope 2) 10000 t CO2e 256.89 terms of environmental management the Company adheres to the policy of "clean production circular development

green transformation and setting industry benchmarks" committed to continuously carrying out clean production

Total GHG Emissions 10000 t CO2e 643.20 building a circular economy industrial chain and vigorously promoting transformation and upgrading as well as green

manufacturing in order to set an environmental benchmark for the chemical industry. In the process of promoting

GHG Emission Intensity t CO2e/Ton of Product 0.339 environmental compliance work the Company strictly follows the applicable laws and regulations such as the Environ-

mental Protection Law of the People's Republic of China and the Yangtze River Protection Law of the People's Republic

of China systematically manages pollution sources within the plant establishes a strict environmental protection

system and ensures the health of employees and environmental safety. During the Reporting Period the Company did

not face any penalties from regulatory agencies due to violations of environmental management laws and regulations.Climate Action

In response to the national policy deployment regarding carbon peak and carbon neutrality goals the Company actively adopts a Governance

series of measures. The Company conducts a detailed analysis of its "carbon peaking and carbon neutrality" situation every year and

adjusts its strategic layout in a timely manner based on actual conditions ensuring that the Company's "carbon peaking and carbon Xingfa Group continues to improve its environmental management system has formulated and implemented the Environmental

neutrality" goals align with the national "carbon peaking and carbon neutrality" goals. By formulating a clear "carbon peaking and Protection Management System and established an environmental protection management department consisting of the Safety and

carbon neutrality" strategic plan the Company not only incorporates carbon reduction targets into its long-term development strate- Environmental Protection Department the Safety Production Committee (Park Segment) and the Safety and Environmental Protec-

gy but also ensures effective control of carbon emissions through regular evaluation and adjustment while achieving economic tion Departments of various production units. This department is responsible for the Company’s environmental protection manage-

benefits. ment supervising inspecting and evaluating the on-site environmental protection management of each unit. The environmental

management department has an environmental monitoring station responsible for the Company's environmental monitoring work

supervising inspecting and evaluating the discharge of wastewater tail gas and noise by each unit according to national standards.The Company has formulated the Management Measures for Reward and Punishment Related to Safety and Environmental Protection

The Company responds to the national call for promoting the low-carbon transformation of incorporating environmental protection management and other indicators into the performance assessment system for management

enterprises carries out carbon verification work and actively participates in carbon market personnel of relevant departments. The Company conducts comprehensive environmental protection capability training and aware-

trading. Currently the Company and its subsidiaries including Hubei Xingrui Trisun Chemi- ness-raising activities including: environmental protection facility management EHS awareness and management capability

Carbon Market cal and Xiangyang Xingfa among 8 units are included in the Hubei Provincial Carbon enhancement standardized management of environmental protection sites hazardous waste site management and special training

Trading Market. Hubei Xingrui and Inner Mongolia Xingfa's thermal power plants are included in the on the management system requirements for "waste water tail gas and solid waste" and hazardous waste ensuring that employees

national carbon market. In 2024 the total verified carbon emissions of the companies (or acquire the necessary environmental protection knowledge and skills.units) in the Xingfa Group that are included in the carbon market for the year 2023 amount- The Company and its subsidiaries actively promote environmental management system certification and review work. Xingfa Group

ed to 5.5904 million tons. and its subsidiaries such as Yidu Xingfa Inner Mongolia Xingfa and Hubei Xingrui have obtained Environmental Management

System (ISO 14001) certification. Subsidiaries such as Hubei Xingrui Sinophorus Electronic Xinjiang Xingfa and Longma Phosphorus

Industry have obtained national-level green factory certification.The country advocates for chemical enterprises to actively participate in the formulation of

domestic and international standards related to carbon peak and carbon neutrality in order

to improve the standard level in this field. The Company has participated in the develop-

ment of national mandatory standards such as energy consumption limits for yellow

Carbon Stan- phosphorus and organic silicon per unit product as well as industry standards like the

dard System Green Engineering Evaluation for the yellow phosphorus industry. Additionally in 2024 the

Company also participated in the formulation of the national standard titled the Require-

ments of the Greenhouse Gas Emissions Accounting and Reporting - Part 45: Phosphoric Acid

and Phosphate Enterprise which has now been published. Moreover Trisun Chemical a

subsidiary of the Company is currently in the consultation phase for the group standard

titled Specification for Carbon Footprint Accounting of Pesticide Products - Glyphosate.

59 602024 Environmental Social and Governance (ESG) Report

Honors and Certifications Related to Environmental Protection (Partial)

Company Name Certification Name Certification Level Strategy

Hubei Sinophorus Electronic Materials Co. Ltd. National Level

Green Factory Risk

Duration

Description of Risk of Impact on Financial CountermeasuresType Impact Value Chain Impact

Exhaust gas emissions may exceed

Weng'an Longma Phosphorus Industry Co. Ltd. National Level

Green Factory standard levels due to equipment failure or Strengthen equipment inspections and

process issues such as tail gas emissions maintenance regularly monitor tail gas

from the yellow phosphorus workshop or

Pollutant and wastewater emissions; improve chlorine emissions from the chlor-alkali

Increase in emergency plans to ensure timely

Xinjiang Xingfa Chemical Co. Ltd. Emissions National Level workshop. Wastewater emissions may Short term Operations

Green Factory and cause water pollution due to pipeline leaks operating costs handling in case of abnormalities

Leakage treatment facility failures abnormal reducing emissions; provide environ-

operation of sewage treatment stations or mental protection operation training

problems occurring in the wastewater for employees to standardize

Hubei Xingrui Silicon Materials Co. Ltd. National Level discharge process of various workshops. operational procedures.Green Factory

Hazardous waste such as waste oil waste

batteries and waste chemicals if improp-

Hubei Trisun Chemical Co. Ltd.Green Factory National Level erly disposed of may leak and pollute soil Establish a strict waste classification

and water bodies such as leaks during

collection and disposal system to

waste oil disposal or improper handling of

Improper laboratory chemical waste liquids. Gener- ensure that hazardous waste is Increase in

handled by qualified units with proper

Chongqing Xingfa Jinguan Chemical Co. Ltd. Waste al waste such as office waste and domes- Short term OperationsNational Level

Green Factory Disposal

operating costs

tic waste if piled up or not disposed of in a records kept; promptly clean and

timely manner can take up space emit transport general waste and strength-

odors and negatively impact the factory en management of waste storage

area and surrounding environment areas.Hubei Jixing Chemical Group Co. Ltd. Provincial Level becoming dirty and chaotic due to untime-

Green Factory ly waste disposal.Baokang Chufeng Chemical Co. Ltd. Environmental protection laws and policies Timely collect and interpret environ-Provincial Level

Green Factory are constantly changing such as stricter mental protection laws and policies;

emission standards and waste manage- regularly assess the Company’s

Regulatory ment requirements. Companies may face Increase in Short term Operations environmental management measures

Risks the risk of non-compliance if they fail to operating costs

and their compliance with regulations

Inner Mongolia Xingfa Technology Co. Ltd. Provincial Level adapt to regulatory changes in a timely

Green Factory manner leading to penalties and legal take actions to plan and implement

liability. improvements in advance.Hubei Xingrui Silicon Materials Co. Ltd. As environmental protection requirements

Green Supply Chain Provincial Level increase companies may need to invest Strengthen cooperation with research

Enterprises large amounts of funds in upgrading institutions and environmental protec-

environmental protection technologies tion companies actively explore new

and optimizing management systems

Weng'an Longma Phosphorus Industry Co. Ltd. Technolo- Reduction in

environmental protection technologies

such as introducing advanced tail gas

Water-Saving Unit Provincial Level gy Operations suitable for the Company; develop a treatment equipment and wastewater Long term Operating

in Guizhou Province Upgrade long-term plan for environmental deep treatment technology. If the downstream

Failure Revenue: technology upgrades and manage-

transformation is not timely or successful

In the performance rating work of key industry enterprises during heavy pollution weather organized by the local government's the Company may be at a disadvantage in ment system optimization implement-

environmental protection administrative department Xingfa Group and its subsidiaries completed the relevant ratings. Among them market competition and face environmen- ing it in phases to ensure smooth

Hubei Xingfa Phosphorus Chemical Research Institute Co. Ltd. obtained an “A” rating in environmental performance and tal pressure as well as negative evaluations transformation.Xingfa Jingguan obtained a “B” rating in environmental performance. from customers and society.

6162

Physical Risk Transition Risks2024 Environmental Social and Governance (ESG) Report

Opportu- Duration Impact on Financial Risk

nity Type Description of Opportunity of Impact Value Chain Impact Countermeasures Risks are identified based on the identification

scope of the Company’s business.By effectively controlling pollutant

Continuously improve environmental

emissions and properly handling

management work actively participate

waste companies can enhance their Risk The Company combines qualitative

Advantages in the formulation of environmental environmental protection image meet Assessment and quantitative methods to analyze

from protection standards and industry customers' demands for eco-friendly and prioritize the identified risks

Environmen- Increase in environmental activities promote the products and corporate social respon- based on the likelihood of occurrence

tal Protection Long term Downstream operating Company’s environmental achieve-sibility increase market competitive- and the degree of impact determin-

Improve- income ments and enhance brand image; ness and attract more customers and ing key areas of focus and risks that

ments explore R&D and production of green partners such as obtaining environ- need priority control. Each depart-

products further tapping into the Risk

mental certifications or participating in The Company uses an online

economic benefits brought by environ- Monitoring ment and subsidiary may select

green supply chain projects thereby monitoring system to conduct appropriate risk assessment methods

mental protection.increasing business revenue. real-time monitoring of cooling based on their own functions and

water for equipment and the main business characteristics to carry out

exhaust outlets to ensure emissions their work.meet standards. Exhaust gases

from other production units after

treatment can also meet emission

standards. Departments at all levels Risk

Management The Company adheres to the principle regularly conduct environmental of consistency between business

Impact Risk and Opportunity Management inspections and production units strategy and risk strategy and also carry out regular self-inspec- balancing risk control with operation-

tions. If environmental hazards are al efficiency. Full-process control

identified during monitoring and

To strengthen environmental risk management the Company has formulated the Risk Management Systemand in accordance with measures are developed for signifi-inspections the relevant depart-

the ISO 14001 Environmental Management System the Company regularly identifies and reviews environmental risk factors contin- cant risks while general risks focus on ments will formulate corrective

uously improving risk control measures. By standardizing daily environmental management continuously upgrading environmental controlling key processes. Each action plans specify responsible

protection facilities and equipment and enhancing emergency response capabilities for environmental incidents the Company department and subsidiary will based persons and deadlines for correc-

constantly improves risk prevention levels and strengthens environmental risk management. on this formulate or revise risk tion and complete the rectification management plans and submit them

and conduct acceptance within the to the Internal Control Department for

specified time. filing. The plan must clearly specify

risk control objectives job responsi-

bilities and response measures for

each stage.

63 642024 Environmental Social and Governance (ESG) Report

Contingency plan and drills Environmental Impact Assessment

To strengthen the monitoring and prevention of environmental risk sources effectively reduce the likelihood of sudden Xingfa Group strictly complies with the Law of People’s Republic of China on Environmental Impact Appraisal and other

environmental incidents and ensure that effective measures can be taken quickly in the event of an emergency minimizing laws and regulations and conscientiously implements the "Three Simultaneities" principle for projects ensuring that

environmental pollution the Company has formulated the Emergency Response Plan for Sudden Environmental Incidents.All environmental protection facilities are designed constructed and put into use simultaneously with the main project to

plans have been filed with and approved by the relevant local authorities. In addition the Company regularly conducts various reduce the potential environmental impact of production activities.emergency drills including comprehensive emergency responses to sudden environmental incidents emergency responses to

hazardous chemical and waste leaks and emergency responses to abnormal operation of environmental protection facilities.These activities aim to improve employees' ability to respond to emergencies reduce risks and damage that may be caused by

sudden environmental incidents and ensure effective prevention and control of potential adverse environmental factors.Through these measures the Company is committed to creating a safer and more environmentally friendly working environ-

ment. Management of Wastewater

Comprehensive Emergency Drill for Hazardous Chemical Accidents Case Study The Company attaches great importance to the potential impact of wastewater discharge on the surrounding environ-

ment and continuously optimizes and upgrades wastewater treatment and management strategies. In accordance with

the Environmental Protection Law of the People's Republic of China and the Law of the People's Republic of China on the

Prevention and Control of Water Pollutionthe Company has established quantitative indicators and a system for waste-

On June 24 2024 Sinophorus Electronic a subsidiary of water management specifically including the discharge of pollutants such as COD ammonia nitrogen total phosphorus

the Company conducted a comprehensive emergency etc. The monitoring results are lower than the industry and regional standards such as the first-level standard of the

drill for a hazardous chemical hydrofluoric acid leak at Integrated Wastewater Discharge Standard (GB8978-1996) and the general water area protection standard of the

the etching solution device tank area in Workshop 2. The Integrated Wastewater Discharge Standard for the Middle and Lower Reaches of the Han River in Hubei Province

drill simulated a leak at the CCB machine in the (DB42/1318-2017) .workshop emergency response by the team and

workshop and the activation of the plan with coordinat-

ed rescue efforts by specialized teams including medical

assistance evacuation and environmental monitoring.The response procedures at all levels were correct Indicator Unit Total Discharge in 2024

effectively improving emergency response capabilities.Wastewater Discharges Ton 1042.25

Wastewater Discharge Intensity t/104 CNY revenue 3.67

Identification of hidden hazards

The Company has established a regular safety hazard inspection mechanism and organizes professional personnel to conduct The Company adheres to strict wastewater management policies fully implements the requirements for the separation

comprehensive safety inspections. For safety hazards identified during the inspections the Company stipulates that the of clean and polluted water and the closed-loop recycling of wastewater and systematically treats wastewater through

responsible individuals must complete the corrective actions within the specified time. physical chemical and biological combined treatment technologies. The wastewater from each yellow phosphorus

production unit is treated and fully recycled in a closed-loop system. Wastewater from other chemical production units

is treated through a specialized treatment process meets the standards and then connects to the park’s sewage

treatment system ensuring zero discharge of production wastewater. The treatment of equipment cooling water uses

an online monitoring system for 24-hour real-time monitoring. Through the prevention and treatment of environmental

protection facilities such as sewage treatment stations the Company and its subsidiaries' wastewater treatment

facilities have been continuously and stably operating during the Reporting Period with no instances of exceeding

discharge standards.

65 662024 Environmental Social and Governance (ESG) Report

The Company has set goals for compliant industrial tail gas emissions and the targets were achieved during the Reporting Period.Types of Pollutant Unit Total Discharge in 2024 Approved Total Discharge

433.79 1719.79 Objective Achievements in 2024Chemical Oxygen Demand (COD) Ton

Ammonia nitrogen (NH3-N) Ton 24.72 158.09

Compliance with Industrial Tail Gas Main Achieved

Pollutant Discharge Standards

The Company has set goals for compliant industrial wastewater discharge and the targets have been met during the Reporting

Period.Objective Achievements in 2024

Compliance with Industrial Wastewater Main Achieved

Pollutant Discharge Standards Solid Waste Treatment

Xingfa Group follows national laws and regulations continuously improving its waste management system to ensure that the

treatment process is environmentally safe reduces environmental and health risks and classifies waste into non-hazardous and

hazardous waste based on its characteristics. Non-hazardous waste mainly comes from general industrial solid waste such as

phosphorus slag desulfurized Gypsum and domestic waste while hazardous waste mainly includes waste filter membranes waste oil

waste paint buckets and phosphorus mud. The Company has established a dedicated management system focused on improving

Management of Tail Gases material utilization efficiency reducing waste generation at the source and promoting resource utilization. The Company strives to

minimize solid waste generation fully utilize resources and ensure safe disposal of solid waste.To reduce the adverse impact of production exhaust on the surrounding environment the Company actively conducts exhaust

emission management and control work. In accordance with the Environmental Protection Law of the People's Republic of China and

the Law of the People's Republic of China on the Prevention and Control of Atmospheric Pollution the Company has developed a

quantitative indicator system for tail gas management and implemented monitoring including the discharge of pollutants such as

sulfur dioxide particulate matter and nitrogen oxides. During the Reporting Period the Company’s tail gas emissions were monitored Types of Pollutant Unit 2024

according to the Grade II emission standard as stated in the Integrated Emission Standard of Air Pollutants (GB16297-1996) the

special emission limits of the Emission Standard of Pollutants for Sulfuric Acid Industry (GB 26132-2010) and the special emission Volume of Non-Hazardous Waste Generated 10000 tons 534.88

limits of the Emission Standard of Air Pollutants for Boilers (GB 13271-2014).The Company has established a comprehensive tail gas treatment system to conduct thorough and deep treatment of various tail Disposal Volume of Non-Hazardous Waste 10000 tons 534.88

gases generated during the production process. By installing an online monitoring system at the main emission outlets 24-hour

continuous real-time data tracking is achieved ensuring strict compliance with emission standards for tail gas discharge. Exhaust Generation Intensity of Non-Hazardous Waste Tons / 10000 yuan of revenue 1.88

gases from other production units are treated through a combination of purification technologies such as in-furnace desulfurization

and denitrification combined with ultra-low emission technology bag dust removal alkaline-washing neutralization activated Volume of Hazardous Waste Generated 10000 tons 5.15

carbon adsorption and RTO high-temperature combustion before being discharged. During the Reporting Period the Company and

its subsidiaries’ tail gas treatment facilities operated continuously and stably with no instances of exceeding discharge standards. Disposal Volume of Hazardous Waste 10000 tons 5.15

Generation Intensity of Hazardous Waste Tons / 10000 yuan of revenue 0.02

Types of Pollutant Unit Total Discharge in 2024 Approved Total Discharge

Sulfur Dioxide (SO2) Ton 1271.13 3529.14

Nitrogen oxide (NOx) Ton 1019.32 3046.46

67 682024 Environmental Social and Governance (ESG) Report

In addition the Control Procedure for Energy Management Operation clearly requires water resource use and each unit should ensure

the recycling and staged utilization of industrial water which is actively implemented at each plant. For example Liu Caopo Chemical

"Grain" Action for Saving and Eliminating Waste - Trisun Chemical in Action Case Study

Treatment Method: Plant established a Water Conservation Management Office and its industrial circulating water renovation project was selected as a

provincial-level water-saving demonstration project in 2022.Units that generate general solid waste and delegate the transportation utilization and Subsidiary Trisun Chemical actively responded to the call of

disposal of industrial solid waste to others must verify the qualifications and technical capabili- As of the end of the Reporting Period several subsidiaries have passed the energy management system certification. During the Xingfa Group seriously implemented the requirements of

ties of the entrusted party and sign a written contract in accordance with applicable laws and Reporting Period the Company was included in the list of "Energy Efficiency Leaders" in key industries by the Ministry of Industry and the Notice on Carrying out Special Actions Against Food

General Solid regulations specifying pollution prevention requirements in the contract. The sale of by-prod- Information Technology of China.Waste and issued the Proposal on Strictly Practicing Thrift

Waste Treatment ucts must also comply with relevant national industry or enterprise standards. and Eliminating Waste. Trisun Chemical actively created a

and Disposal To improve energy management efficiency and ensure energy-saving and emission-reduction results the Company signs the Energy

When general solid waste enters and exits the plant area the environmental protection good atmosphere for the "Grain" Action for saving by Management Target Accountability Statement with each production unit at the beginning of every year implementing the responsi-

management department of each unit is responsible for supervising the plant gatekeepers to posting proposals in various areas of the cafeteria hanging bility system at all levels. The Energy-saving Office conducts energy-saving and emission reduction assessments which include

conduct strict registration and ensure that no solid waste spillage or leakage occurs after the promotional slogans setting up promotional boards and evaluating the completion of the "dual control" targets for total energy consumption and intensity energy-saving inspections project

vehicle leaves the plant area. other methods. In addition the Company organized a energy-saving reviews coal consumption reduction targets and more. Advanced units and individuals in energy-saving management

working group to strengthen the supervision of cafeteria are rewarded.waste behaviors through on-site supervision and video

Treatment Method: monitoring to track and review actions. For personnel

Hazardous waste transportation between production units must be approved by the environ- violating the management measures the Company takes

mental protection management department with entry and exit of the plant area based on the early-stage persuasion and gradually implements public

Hazardous Waste Inbound and Outbound Form. Departments generating hazardous waste notices and assessments guiding employees to develop good habits of civilized dining and resource conservation.should report the management plan and relevant information on the hazardous waste Through continuous efforts the Company strives to make every employee a practitioner and disseminator of resource

management platform. When disposal is needed they should contact a qualified disposal unit Hazardous saving.and handle the electronic joint form as required entrusting a hazardous waste transportation Waste Treat-

unit with the transportation. ment and

Disposal

The storage principle for hazardous waste should not exceed one year. If storage exceeds this

period approval from the local ecological and environmental department is required and Resource Utilization

relevant information should be submitted to the environmental management department for

record. The environmental management department should strengthen supervision over

hazardous waste stored beyond the approved period.Xingfa Group actively responds to the national energy-saving and emission-reduction

Measures for Treatment Method: call follows the Energy Conservation Law of the People's Republic of China the Water

Recycling and Law of the People’s Republic of China and other relevant resource management laws and

Utilization of Non-hazardous waste should be classified for collection storage transportation utiliza- regulations. Through technological innovation and management optimization the group

Waste tion and disposal identification with recyclable parts being collected for recycling. explores more efficient resource utilization models and is committed to building a

resource-saving and environmentally friendly enterprise.The Company continuously optimizes its energy structure and actively uses renewable

energy in its production and operational activities. The energy structure includes coal

diesel gasoline natural gas power (including photovoltaic power generation and hydro-

Green Life electric power) and thermal energy. Regarding water resource utilization the Company

mainly uses municipal water surface water and groundwater ensuring a stable water

Xingfa Group actively advocates and fully promotes the concept of green office supply while implementing various water-saving measures to promote rational water

practices. The Company encourages all employees to start from the small things use.Green Electricity Certificate

Transaction Vouchers

in daily life saving every sheet of paper every drop of water and every kilowatt

of power promoting the use of electronic documents and online collaboration

tools to reduce paper consumption and carbon emissions. We also encourage

employees to use video conferencing software for remote communication reduc-

ing unnecessary business trips thus lowering energy consumption and transpor- Governance

tation-related carbon emissions. The Company has set up clear waste sorting

The Company adheres to the resource management philosophy of "legal compliance clean production energy conservation and

guidelines equipped with sorting trash bins and regularly organizes training to

efficiency improvement and sustainable low-carbon development" and has developed a series of management measures such as the

enhance employees' environmental awareness and participation.Energy Management Handbook the Energy Management Operational Control Procedure the Energy Design Control Procedure and

The Company strongly advocates the concept of "advocating thrift opposing waste." The Company issued the Notice on Carrying out the Energy Conservation Management System covering all business aspects including energy procurement energy management

Special Actions to Combat Food Waste launching a special campaign against food waste throughout the Company responding to the facility maintenance energy usage monitoring and energy use assessments. The Company has built a complete energy management

national call and establishing the value concept of "waste is shameful saving is glorious" making the "Clean Plate Campaign" a shared system and appointed a management representative to work with departments to ensure effective energy management.behavioral consensus among employees.

69 702024 Environmental Social and Governance (ESG) Report

In addition the Control Procedure for Energy Management Operation clearly requires water resource use and each unit should ensure

the recycling and staged utilization of industrial water which is actively implemented at each plant. For example Liu Caopo Chemical

Plant established a Water Conservation Management Office and its industrial circulating water renovation project was selected as a

provincial-level water-saving demonstration project in 2022.As of the end of the Reporting Period several subsidiaries have passed the energy management system certification. During the

Reporting Period the Company was included in the list of "Energy Efficiency Leaders" in key industries by the Ministry of Industry and

Information Technology of China.To improve energy management efficiency and ensure energy-saving and emission-reduction results the Company signs the Energy

Management Target Accountability Statement with each production unit at the beginning of every year implementing the responsi-

bility system at all levels. The Energy-saving Office conducts energy-saving and emission reduction assessments which include

evaluating the completion of the "dual control" targets for total energy consumption and intensity energy-saving inspections project

energy-saving reviews coal consumption reduction targets and more. Advanced units and individuals in energy-saving management

are rewarded.Energy-saving Management Organization and Responsibilities

Investment and Development Department

Undertake energy-saving management improve energy-saving management systems and related technical standards

supervise and inspect the implementation of energy-saving work conduct energy-saving target assessments and

coordinate energy-saving management across departments.Phosphorus and Sulfur Division Mining System Chief Engineer's Office Yichang

Park Dispatch Center and Yidu Park Dispatch Center

Supervise energy-saving management in all segments and provide the business guidance supervision and evaluation

for the energy-saving management in their respective units.Functional Departments Energy Management System Certification of Subsidiary Units

Establish energy-saving management responsibility lists for departments and clarify energy-saving management

responsibilities.Production Units

Formulate and implement energy-saving plans and measures and conduct internal energy audits and other measures to

The Company adheres to the resource management philosophy of "legal compliance clean production energy conservation and ensure that energy-saving targets are achieved in their units.efficiency improvement and sustainable low-carbon development" and has developed a series of management measures such as the

Energy Management Handbook the Energy Management Operational Control Procedure the Energy Design Control Procedure and

the Energy Conservation Management System covering all business aspects including energy procurement energy management

facility maintenance energy usage monitoring and energy use assessments. The Company has built a complete energy management

system and appointed a management representative to work with departments to ensure effective energy management.

71 722024 Environmental Social and Governance (ESG) Report

Training on Professional Capability

Risk Duration Impact on Financial Countermeasures

The Company focuses on the professional development of its staff requiring personnel in relevant positions to have certain practical Description of RiskType of Impact Value Chain Impact

experience in energy management. The Company provides training on energy measurement statistical management and equipment

operation for on-the-job employees and conducts pre-job training for energy equipment operators. Additionally the Company

organizes internal auditor training for employees on the energy management system. As of the end of the Reporting Period a total Energy price fluctuations such as the Establish an energy procurement risk

of 10 employees have obtained internal auditor qualifications. Market rise in coal natural gas and other Short term Increase in Upstream management system to stabilize energy

Risk prices increase the Company’s

operating costs procurement prices through long-term

energy procurement costs. contracts and other methods.Training on Energy Management System Documentation and Internal Audit Knowledge Case Study

Energy raw materials that do not meet Strengthen inspection and testing and

requirements can result in unstable strictly prohibit the acceptance of

In 2024 the Company's key energy-consuming units

product quality or even defects; non-compliant energy raw materials.organized energy management personnel to participate in unreasonable production organization

energy management system documentation and internal Organize production reasonably and

audit knowledge training. The training covered various Manage-

can cause energy waste and low Reduction in

make good use of the tiered power

ment Risks production efficiency; insufficient Short term Operations Operating aspects such as the basic concepts of energy management pricing policy.capability of new employees or Revenue

systems standard requirements internal audit procedures transferred personnel can lead to Strengthen training on the energy

and techniques etc. It emphasized the crucial role of energy improper operations causing knowledge and operation of energy-us-

management in the sustainable development of enterprises equipment failures or safety accidents ing equipment and only allow

enhanced the professional capabilities and management thus affecting production progress. employees to work after passing exams.levels of the trainees and injected new vitality into the

Company's energy management efforts.Opportu- Description of Duration Impact Potential

nity Type Opportunity of on Value Financial Countermeasures

Impact Chain Impact

Strategy The Company has taken the lead in the industry by establishing an energy management center platform. The

construction of this platform has realized unified

Energy Utilization Strategy scheduling of chemical and hydropower production

energy conservation emission reduction and workforce

The digital energy management efficiency improvements which can reduce sulfur

Improvement system (EMS) achieves real-time Long Decrease in dioxide carbon dioxide and dust emissions to some

of Manage- optimization and reduces overall

Operations

Risk Duration Impact on Financial term operating costs extent. After the project was implemented it achieved Description of Risk Countermeasures ment energy consumption.Type of Impact Value Chain Impact good economic environmental and social benefits. The

Efficiency Company has become a benchmark enterprise for energy

conservation emission reduction and the integration of

information technology and industrialization

Changes in energy-related policies such as

(two-in-one) with its exemplary experience receiving

the Measures of Hubei Province for Timely collect and understand

national industry standards high praise from the Ministry of Industry and Information Implementing the Energy Conservation Law

and legal requirements related Technology of China and being promoted nationwide.of the People's Republic of China and the

Policy

Catalog for Eliminating Outdated Produc- to energy.Risk

tion Capacity Processes and Products Increase in With the country's increasing Medium term Operations Negotiate solutions with legal

(First Second Third and Fourth Editions) operating costs focus on and support for clean

advisors to handle emergen-

indicate stricter energy conservation and energy hydropower as a

cies and regularly conduct

emission reduction policies raising energy renewable and non-polluting

compliance evaluations for

consumption standards for the chemical energy source has broad

compliant operations.industry and restricting production in development prospects. The Hydropower By 2024 Xingfa Group had owned 32 hydropower

high-energy-consuming enterprises. Company can utilize local water Business Long Operations Reduction in stations with a total installed capacity of 180300 kW and resources for hydropower

Opportuni- term operating costs an annual power generation of approximately 500 generation increase investment

Increase R&D investment ties million kWh.The rapid updating of new energy in the hydropower business and actively introduce and develop

utilization technologies may cause the drive technological innovation to

Technol- Increase in advanced energy utilization

Company's existing energy utilization Long term Operations improve generation efficiency

ogy Risks operating costs technologies and collaborate

technology to become outdated leading and stability bringing stable with research institutions to

to rising energy costs. energy revenue and a positive maintain technological advance-

social image to the enterprise.ment.

73 742024 Environmental Social and Governance (ESG) Report

Water Resource Utilization Strategy Energy Utilization

Potential Impact Risk and Opportunity ManagementRisk Description of Risk Duration Impact on Countermeasures

Type of Impact Value Chain Financial Impact To effectively identify energy utilization risks and opportunities in production and service processes the Company enhances its risk

resilience through strategies such as risk avoidance risk acceptance risk reduction and risk sharing. The Company has formulated

the Risk and Opportunity Response Control Procedure. The Phosphorus and Sulfur Division organizes departments (units) annually to

The areas where hydropower stations Strengthen and protect hydropower

are located may face natural disasters station facilities to improve their identify review improve and update the opportunities and risks in the energy management system as well as prepare the Risk and

such as floods and mudslides which disaster resistance; develop emergency Opportunity Assessment Form.Natural can damage the hydropower station Short Operations Increase in response plans to quickly respond in

Disaster Risks facilities affect power generation term operating costs case of disasters reducing downtime;

efficiency and even lead to power purchase relevant insurance to transfer

outages resulting in economic losses part of the economic loss risk caused

for the Company. by natural disasters.Sign long-term stable water supply

contracts with suppliers and agree on a Risk and Opportuni-

Water prices are affected by market reasonable price adjustment mecha-

supply and demand policy ty Management nism; implement water-saving projects

Water Price adjustments and other factors. If to reduce water usage and minimize Process

Fluctuation water prices rise it will increase Xingfa

Long Increase in

Operations

Group's production costs especially term operating costs

the cost increases caused by rising

Risks water prices; stay informed about

for chemical production processes policy developments and actively

that consume a lot of water which participate in relevant hearings on

may compress profit margins. water price adjustments to express the

Company's reasonable demands.The production of wet-process

phosphoric acid purification and Risk Risk Analysis Risk Monitor- Risk

electronic chemicals requires a large and Assess- ing and Response

amount of high-purity water and Increase in Identification ment Improvement

Water Quality wastewater contains pollutants such Medium Operations operating costs Strengthen online water quality

Risks as phosphorus and fluorine. If purifica- term downstream and decrease monitoring systems.tion processes fluctuate or wastewater in operating

treatment fails to meet standards it revenue.may lead to environmental penalties

or customer quality claims.Each department (unit) The severity and frequen- At least one risk and Each implementing

Opportu- Duration Impact on Potential should fully identify the cy of the identified risks opportunity review should department should assess Description of Opportunity

nity Type of Impact Value Chain Financial

Countermeasures risks and opportunities in should be evaluated be conducted annually to the identified risks and

Impact the management activities according to the risk verify their effectiveness take actions based on the

within its jurisdiction and severity evaluation and prevent and reduce evaluation results to

Through technological innovation and assess the identified risks. criteria. The confirmation adverse impacts. reduce or eliminate risks.equipment upgrades strengthen

Actively promote the experience of of the risk's severity and The methods of risk

cooperation with universities and

efficient water recycling plants across frequency is used to response include: risk

Innovation research institutions to carry out the Company accelerate the promo- determine the risk acceptance risk reduc-

and technological innovation and R&D

Reduction in

tion of intelligent and digital construc- coefficient based on tion risk avoidance and

Cooperation work improve the recycling rate of

Long term Operations Operating

tion for wastewater treatment and

water resources reduce the pollution Costs which appropriate risk transfer.Opportunities comprehensively strengthen data

risks to water resources decrease measures are taken to

governance for water resource

dependence on fresh water reduce address the risk.utilization.production costs and achieve

sustainable development.

75 762024 Environmental Social and Governance (ESG) Report

Energy-saving Measures Metrics and Targets

The Company focuses on strengthening energy management reducing consumption minimizing losses and pollutant emissions The Company adheres to goal orientation sets energy-saving and emission-reduction targets at the beginning of each year assigns

preventing waste and effectively and reasonably utilizing energy from energy production to consumption at every stage. The responsibilities to each production unit and conducts daily supervision to promote target achievement.Company has established an energy-saving leading group conducts energy audits according to relevant national energy-saving

standards and specifications and improves energy efficiency through energy-saving technological transformations production

process optimizations energy-saving equipment replacements and the use of renewable energy.During the Reporting Period the Hubei Energy Conservation and Carbon Reduction Center conducted a “look-back” special on-site Energy-Saving Management Goals for 2020-2025

inspection of the Company’s energy conservation. The Baishahe Chemical Plant eliminated 490 outdated motors deactivated 3

motors and replaced 2 with variable frequency motors. The Liucaopo Chemical Plant eliminated 288 outdated motors deactivated

and dismantled 3 motors and replaced 1 with a 30kVA transformer. All rectifications were completed in accordance with energy Energy Consumption "Dual Control" Target: The energy consumption per ten

conservation and carbon reduction requirements. thousand yuan of output value will decrease by more than 13.5% compared to

2020 and the annual targets set by all levels of government will be completed.

Distributed Photovoltaic Power Station in the Wanli Chemical Park Case Study

Product Energy Efficiency Target: Achieving energy efficiency benchmark

levels industry-advanced values and budget control targets according to

different industries.Carbon Emissions Management Target: Achieving carbon emission intensity

In September 2024 the Company began the construc- control targets set by national and provincial/city governments.tion of the distributed photovoltaic power station

project at the Yuan’an Wanli Chemical Park. By Energy Management System Operational Target: The energy management

December the full capacity grid-connected power system of key energy-consuming units will operate effectively and pass certifi-

generation was completed with a cumulative installed cation audits.capacity of 14.2 MW (8.2 MW connected to the grid).Type Unit Actual Energy Consumption in 2024

Replacement of Gas Waste Heat Evaporator at Liucaopo Chemical Plant Case Study

Total Direct Energy Consumption 10000 tce

In January 2024 the Liucaopo Chemical Plant replaced severely aging gas waste heat evaporators and added steam-water 129.93

separators to improve steam generation efficiency and reduce gas consumption. After the modification overall sealing and

heat exchange efficiency were enhanced reducing gas consumption by 10% saving approximately 485.76 tons of standard Coal 10000 tce 123.24

coal for the entire year.Diesel 10000 tce 0.33

Natural gas 10000 m3 4256.89

Electrode 10000 tce

Digital Energy-Carbon Control 0.70

Total Indirect Energy Consumption 10000 tce 73.71

To achieve refined energy management the Company

applies technologies such as the Internet of Things big Green Electricity Consumption 100 million kWh 10.02

data cloud computing edge computing and intelligent

gateways. It continues to develop digital systems that can Total Energy Consumption 10000 tce 203.64

visualize energy consumption and carbon emissions

provide multi-dimensional and multi-scale dynamic energy Energy Consumption Intensity tce/10000 yuan of revenue

efficiency evaluations and track and quantify carbon 0.72

emissions. The system is currently in the trial operation

phase. Digital System

77 782024 Environmental Social and Governance (ESG) Report

Water Resource Utilization

Impact Risk and Opportunity Management Water Conservation Measures

To strengthen its ability to respond to water resource risks the Company continuously improves its water resource risk and opportu- In accordance with the spirit of the Ministry of Industry and Information Technology and the National Water Conservation Office's

nity management processes comprehensively identifying the risks and opportunities faced in production and operation activities Notice on Deepening the Construction of Water-Saving Enterprises the Company implements relevant regulations such as the Regula-

implementing risk prevention and control measures and adopting diversified response strategies to ensure the stability and sustain- tions on Water Conservation of Hubei Province and the Implementation Plan of Water Conservation Action in Hubei Province and is

ability of water resource management. committed to building water-saving enterprises.Risk and Opportunity Management Process

The Company uses new water-saving equipment such as a water and mist saving

cooling tower device and ANJDP500-6640 energy-saving water pump.Combining the macro environment the

industry it operates in and its business The evaporated condensed water in the Glyphosate Hydrolysis Workshop and the

Targeted preventive measures model the Company comprehensively methanol-reclaiming area is recycled to the machine sealing water tank for circulation

are formulated and effective- identifies the water resource risks and reducing wastewater generation and achieving the recycling of mechanical seal water.ness evaluations are conduct- opportunities it faces.ed to ensure risks are control- Risk Identification

lable.识别 After pre-treating evaporated condensed water with membrane treatment and adsorption filtration it is used for production cleaning water replenishment and other

purposes realizing the recycling of evaporated condensed water.Risk Analysis and Water

Assessment Conserva- Through the digital system water resource consumption is monitored in real-time

Risk Response and intelligent scheduling is implemented to improve water resource utilization tion Mea- efficiency.sures

The Company has built a large ditch rainwater collection system to collect rainwater

and surface water purify it and recycle it.Risk Monitoring Prioritize risks based on factors such as the likelihood of occur-

rence the severity of impact etc.Through the digital system the

Company supervises water The water usage in the yellow phosphorus and gas production systems is self-circulat-

resource usage conducting ing.real-time monitoring and early

warning for risk points in the

production process.The Company consistently promotes water conservation through bulletin boards

publicity columns signs and OA announcements to raise employee awareness of

water conservation.

79 802024 Environmental Social and Governance (ESG) Report

Metrics and Targets

The Company continuously improves its water resource management indicators and through various water-saving measures Setting an Industry Benchmark in the Yangtze River Protection Campaign

efficiently utilizes every drop of water to achieve water resource recycling and minimize losses.Xingfa Group always prioritizes ecological protection and fully promotes five major initiatives: shutdowns transformation

relocation pollution control and restoration.Water Conservation Renovation Project of Inner Mongolia Xingfa Case Study The Company was among the first chemical companies in the Yangtze River Economic Belt to implement facility relocations

and shutdowns dismantling a total of 32 riverfront units. All direct discharge outlets in the industrial park have been sealed

In 2022 Inner Mongolia Xingfa a subsidiary of the Company invested RMB 55 million to complete the water-saving and sewage treatment facilities were upgraded to 1.5 times the actual demand. Through process improvements and

renovation project at its industrial park. After purification through a reclaimed water reuse system the water is returned for enhanced environmental protection the park has reduced emissions by 30% cut annual water withdrawal by 50% on a

use in the thermal power plant’s water intake and circulating water replenishment achieving zero liquid discharge and comparable basis and achieved a comprehensive utilization rate of over 95% for the “four wastes.” Discharged wastewater

water conservation within the plant. Due to the successful implementation of its water-saving renovation project Inner contains organophosphorus at levels below 0.2 mg/L well below the national standard of 0.5 mg/L. Pollutant emissions have

Mongolia Xingfa received a reward of RMB 5 million from the Department of Industry and Information Technology of the been reduced at the source preventing the direct discharge of industrial wastewater and solid waste into the Yangtze River.Inner Mongolia Autonomous Region. An investment of RMB 112 million was made to restore and green 900 meters of vacated shoreline constructing a high-stan-

dard riverside greenbelt and transforming industrial shorelines into ecological ones.In addition the Company actively participates in the development and activities of the Yangtze River Protection Education

Base helping raise public awareness and engagement in environmental protection.Ecological Protection and Biodiversity

As one of the largest fine phosphorus chemical enterprises in China Xingfa Group has consistently adhered to the

concept of green development. It continues to leverage its resource advantages to foster and transform new green

growth drivers reducing its environmental impact while actively responding to national calls fulfilling its commitment

to ecological protection and achieving a harmonious integration of ecological and economic benefits.

81 822024 Environmental Social and Governance (ESG) Report

Construction of Green Mines

With the support and guidance of the Ministry of Natural Resources

and the Department of Natural Resources of Jiangsu Province Xingfa

Group earnestly implements General Secretary Xi Jinping’s directive to“well-coordinated environmental protection instead of excessivedevelopment”. The Company advances the philosophy of “ecologicalpriority and green development” ensuring this concept takes root

blossoms and bears fruit within the Company and remains firmly

committed to the path of ecological priority and green development.The Company started the construction of green mines in 2012 and

holds 6 phosphate mining rights (5 national-level green mines and 1

provincial-level green mine). It has established a garden-style green

mining development demonstration area centered around the

Shukongping mining area characterized by green mountains harmo-

nious mining enterprises resource conservation and intelligent devel-

opment. The Company has been recognized as a national demonstra-

tion base for the comprehensive utilization of low- and medium-grade

phosphate mines.The Company continuously increases its R&D investment promoting

technological breakthroughs mechanization digitalization and intelli-

gent transformation to achieve more scientific mining methods and

more efficient resource utilization. This has led to the coordinated

achievement of economic ecological and social benefits in resource

development forming a circular economic development model of

"innovation in circulation efficiency increase in circulation." Demonstration Area (Houping Phosphate Mine)

Xingfa Group has always adhered to the combination of mining opera-

tions with environmental governance focusing on key and classified

management. The Company actively explores new models for green

mine construction and ecological restoration. With an investment of

RMB 360 million the Company has carried out filling of goaf areas and

comprehensive geological disaster management across various mining

areas thoroughly eliminating safety hazards and centralizing the

treatment of underground wastewater to achieve standard emissions

fundamentally improving the ecological environment of the mining

area and restoring the original ecosystem. First the Company invested

more than RMB 63 million in land reclamation and vegetation

restoration turning the former waste stone yard into forests and

gardens. Second the Company invested over RMB 50 million in the

comprehensive remediation of 20000 mu of land that was inefficient

or damaged by natural disasters while assisting local residents in

developing specialty planting and livestock farming. Third the Compa-

ny invested RMB 100 million to build new homes for residents and

employees of the mining area. Fourth extensive soil covering and

greening actions were carried out in the mining area completing the

covering and greening on 300 mu of land planting 15000 trees such

as camphor trees magnolias and osmanthus and 24000 shrubs such Houping Ore Dressing Plant Shukongping Smart Center

as climbing ivy and azaleas. The Company has achieved 100% greening

of the potential greening area in mines.

83 8403 Innovationand Quality

Improvement

Driving Industrial Upgrades

SDGs Responded in this Chapter

Material ESG Topics Covered in this Chapter

□ Innovation-Driven Development

□ Safety and Quality of Products and Services

□ Supply Chain Security

Key Achievements in 2024

□ Data Security and Customer Privacy Protection

High-tech Enterprises:

R&D Investment: Total Number of 16

1.188 Authorized Patents: Specialized and Sophisti-RMB

1421 cated Enterprise that Produces Novel and billion Unique Products:

6

85 862024 Environmental Social and Governance (ESG) Report

Innovation-Driven Development

Innovation Project Initiation Project Implementation Project Change and Termination

Xingfa Group strictly complies with the Law of the People's Republic of China on Science and Technology Progress and

adheres to an innovation-driven development strategy. The Company continuously increases R&D investment and

strengthens the construction of its R&D team achieving industry-leading innovation capabilities.Application and Appraisal of Project Acceptance and

Project Results Evaluation

Governance

R&D Process

The Company has developed management systems such as the Technical Innovation Management System the Financial Management

Measures for Research and Development Expenditure and the Management Measures for R&D Technical Personnel. The Technology Xingfa Group emphasizes R&D team building and talent development. According to the Management Measures for R&D Technical

Center as the centralized management department for the Company’s technological innovation manages the entire process of Personnel the Company has made clear regulations regarding the professional background and abilities of R&D personnel as well as

technology innovation projects including project initiation implementation modification termination project funding acceptance the methods and procedures for selecting and appointing them. It encourages employees to participate in the professional technical

evaluation project achievement identification patent applications and implementation. title evaluations organized by relevant national departments related to the Company's R&D and strives to build a specialized R&D

The Company has established an R&D innovation system coordinated by the Technology Innovation Leadership Team. R&D platforms team that adapts to the Company's long-term development.have been set up according to the Company's industrial sectors with each platform specifically responsible for the implementation

of R&D projects continuously tackling technical difficulties and promoting the Company's sustained high-quality development.Composition of R&D Team

49

Technological Innovation Leading

Group of Xingfa Group 545

393

Educational 643

Background Age Structure

Structure of R&D 58 of R&D

Technology Center Personnel Personnel

1171

367

Doctoral Degree Under 30 (exclusive) years old

Master’s Degree 30 (inclusive) to 40 (exclusive) years old

Bachelor’s Degree 40 (inclusive) to 50 (exclusive) years old

50 years old or above

Key Performance

Number of R&D Team Members: 1613 Persons;

Xingfa Group R&D System Organizational Structure Diagram

Proportion of R&D Personnel to Total Employees: 11.42%

8788

Engineering Technology Research

Center for Comprehensive

Utilization of Carbon Resources

Engineering Technology

Research Center of New Energy

Materials

Engineering Technology Center

for Safe and Efficient Mining and

Sorting of Phosphorus Ores

Xinjiang Uygur Autonomous

Region Engineering Technology

Research Center of Sulfur

Chemical and Derivatives

Hubei Engineering Research

Center for Clean Production of

Wet-Process Phosphoric Acid

Hubei Engineering Technology

Research Center of Phospho-

rus-Based Fine Chemical

Hubei Engineering Technology

Research Center of Green

Herbicide

National & Local Joint Engineer-

ing Research Center of New

Organosilicon Materials

Hubei Engineering Research

Center of Electronic Chemicals2024 Environmental Social and Governance (ESG) Report

R&D Capability Certification Strategy

With its outstanding R&D strength the Company and its subsidiaries have had 16 institutions certified as high-tech enterprises and

6 companies have received the "Specialized Refined Special and Innovative 'Little Giant'" recognition. In addition the Company

participates in the Technical Committee of the Inorganic Chemical Branch of the National Chemical Standardization Technical Dura-Risk tion of Impact on

Potential

Committee the Sulfur and Sulfuric Acid Subcommittee and the Chlor-Alkali Subcommittee working with industry peers to promote Description of RiskType Impact Value Chain

Financial Countermeasures

Impact

technological progress and industrial upgrading.R&D projects face uncertainty as

new technologies may fail due to Establish a diversified R&D team encompassing

technical challenges or poor professionals from multiple fields strengthen

R&D Project Evaluation experimental results leading to technical communication and collaboration and

losses in preliminary investments. enhance the ability to overcome challenges; set

up a dedicated technical monitoring group to

The Company implements group management for R&D projects and follows a combined quarterly and annual evaluation model. Each Rapid technological advance-

R&D platform is dynamically managed and each R&D project must set quarterly evaluation goals. The Technology Center organizes Technolo- ments mean that if the Company’s Long Increase in

track industry technology trends and adjust R&D

Operations directions promptly; improve the intellectual

an evaluation team to conduct quarterly assessments scoring the projects based on the completion of quarterly goals. Projects are gy Risks R&D lags behind existing technol- term operating costs

ogies can become outdated property protection system strengthen the ranked according to annual scores and the total amount of annual project rewards for R&D personnel is linked to the rankings.diminishing market competitive- internal confidentiality system sign strict

ness. Additionally the risk of confidentiality agreements with employees

technology leaks could weaken encrypt key technologies and offer regular

the innovation advantage and lead intellectual property training to raise employee

to intellectual property disputes. awareness of protection.R&D Incentives Conduct a thorough market research in the early

stages of product development to analyze the

To reward teams and individuals who have made outstanding contributions to the Company’s technological innovation work and to

needs preferences and market trends of target

stimulate the innovation enthusiasm of the Company’s technical staff the Company has established the Scientific and Technological customers and provide a basis for product

Achievement Award System setting up the Science and Technology Awards Patent Awards and Xingfa Group Science and Technolo- For new products developed positioning and design; formulate precise

gy Cooperation Awards incentivizing project teams and individuals through bonuses. through R&D if the market marketing strategies use both online and offline

Market acceptance is low or demand is Long Operations Increase in

multi-channel promotion organize product

Risk insufficient it may lead to unsold term downstream operating costs

launch events participate in industry exhibitions

2023 Annual Commendation and Technological Innovation Conference Case Study products failing to achieve the and collaborate with industry media for publicity

expected economic benefits.and reporting; establish a market feedback

mechanism to promptly collect customer

On February 19 2024 Xingfa Group held the 2023 Annual Commendation and Technological Innovation Conference in feedback and optimize product performance and

Xingshan County. The conference comprehensively summarized the Company’s work achievements in 2023 and recognized functions based on the feedback.outstanding individuals and teams in various fields. During the conference teams receiving the Science and Technology

Progress Award were granted a total of RMB 14 million with individual team bonuses reaching up to RMB 2 million. The Optimize corporate financial budget manage-

conference also commended the recipients of the “Friendship Medal” 60 labor models and 811 outstanding employees of ment allocate funds reasonably and ensure Insufficient funds or poor adequate funding for R&D projects; expand

Xingfa Group. financing channels may disrupt financing channels establish long-term partner-

R&D innovation. Furthermore ships with banks and other financial institutions

Financial after R&D results are commercial- Long Operations Increase in seek preferential loan policies and pay attention

Risk ized if promotion is inadequate or term operating costs to the capital market carrying out equity

sales channels are ineffective it financing at appropriate times; strengthen the

may be difficult to recover funds sales team develop scientific sales strategies

affecting the Company’s cash explore diversified sales channels cooperate with

flow. distributors and agents increase product market

share and accelerate capital recovery.Develop a competitive compensation and

Talent loss and shortages benefits system offer salaries above the industry

constrain R&D innovation. If the

Increased average provide comprehensive benefits and

Company cannot attract and

Operating performance-based incentives; create a positive

retain high-quality professionals Operations

Talent Risk Long Costs corporate culture and working environment

it will affect the stability and term downstream

Declining focus on employee career development plans

innovation capacity of the R&D

Revenue offer abundant training and promotion opportu-

team limiting the development of nities establish a talent pool conduct regular

R&D and innovation work. talent assessments and prepare for talent

replenishment in advance.

89 902024 Environmental Social and Governance (ESG) Report

Dura- Impact Potential Metrics and TargetsOpportu- Description of Opportunity tion of

nity Type on Value Financial CountermeasuresImpact Xingfa Group actively responds to the national innovation-driven development strategy using technological innovation as the core Chain Impact

driving force for achieving high-quality development and has formulated a series of clear and ambitious technological innovation

goals.Increase R&D investment to

upgrade existing products develop

Product Increase R&D investment encourage internal

higher-end more value-added Increase in

Upgrade innovation and collaborate with research Technological Innovation Goals and Achievements

products and expand into emerg- Medium operating

Opportuni- Downstream

ing fields such as new energy and term

institutions to conduct cutting-edge technol-

income

ties ogy research.electronic materials to create

growth points. Talent Recruitment

The Company has hired Chen Fen’er Academician of the Chinese Academy

of Engineering and Chi Ru'an Academician of the Russian Academy of

Strengthen integration with Engineering as the Company’s chief scientists. Now we have 500 full-time

full-time R&D personnel

Industry downstream industries such as Strengthen cooperation and communication R&D personnel including 49 PhDs and 392 Masters.Increase in 500

Integration electric vehicles develop custom- Long with downstream companies establish

Downstream operating Innovation System Construction and Innovation Projects

Opportuni- ized products expand business term industry alliances and jointly carry out

income PhDs Masters

ties areas and achieve collaborative technological R&D and market promotion. The innovation system has been continuously improved. By the end of the

development. Reporting Period the Company had established 3 national-level innovation 49 392

platforms (a National Enterprise Technology Center the National-Local

Joint Engineering Research Center for Organosilicon New Materials and a

National Postdoctoral Research Workstation). It also possessed 12 provin-

cial-level innovation platforms (Hubei Technology Research Institute of

Impact Risk and Opportunity Management Phosphorus Chemical Industry Hubei Engineering Technology Research technological innovation projectswere implemented

Center of Phosphorus-Based Fine Chemical Hubei Engineering Technolo-

gy Research Center of Green Herbicide Hubei Engineering Technology

The Company continuously optimizes the risk and opportunity management process for R&D innovation controlling risks in all 86Research Center of Chlorosilane and Polymer Hubei Phosphorus Chemical

aspects of the R&D process. By improving process management and strengthening market demand analysis the Company aims to Technology Achievement Transformation and Pilot-Scale Test Base Hubei new products new technologies

reduce the risk possibilities ensuring the continuity of technological innovation. Engineering Research Center of Electronic Chemicals Xinjiang Uygur

Autonomous Region Engineering Technology Research Center of Sulfur 68 37

Risk and Opportunity Management Process Chemical and Derivatives Xinjiang Fine Sulfur Chemical Key Laboratory

Hubei Engineering Research Center for Clean Production of Wet-Process

Risk Identification Phosphoric Acid Hubei Engineering Research Center of Organosilicon New authorized patents

Materials Hubei Provincial Enterprise Technology Center of Hubei Trisun

Chemical Co. Ltd. Hubei Provincial Enterprise Technology Center of Hubei

Conduct comprehensive risk and opportunity identification for its R&D processes based on the market Sinophorus Electronic Materials Co. Ltd. Hubei Provincial Enterprise 1421

environment. Technology Center of Hubei Sinophorus Electronic Materials Co. Ltd.). invention patents

Risk Analysis and Assessment Additionally the Company led the establishment of one provincial-level

innovation platform (Hubei Three Gorges Laboratory). During the Report- 483

ing Period 86 technological innovation projects were implemented result-

Based on current rules and measures analyze factors such as the possibilities of risk occurrences and the ing in the development of 68 new products and 37 new technologies. utility model patents

severity of impact. Prioritize risks develop prevention and control strategies according to priority.Patents 938

Risk Response As of the end of the Reporting Period the Company holds 1421 authorized

patents including 483 invention patents and 938 utility model patents.Develop targeted preventive measures. Petrochemical Federation and Science and Technology Awards provincial-level science and

technology awards

During the Reporting Period the Company received 3 awards from the

Risk Monitoring Petrochemical Federation and provincial-level science and technology 3

awards.Evaluate the effectiveness of the measures to ensure the risks are controllable.

91 922024 Environmental Social and Governance (ESG) Report

Cooperation

Long-term R&D Goals Directions of Cooperation ProjectsPartners

By the end of 2025 the total number of full-time R&D personnel will exceed 700 including more than 90 PhD Shenzhen Institute of A total of 16 cooperative projects have been carried out. The two parties jointly established the

holders. Advanced Technology “Black Phosphorus Joint Laboratory” and conducted a series of industrialization application

Chinese Academy of research focusing on silicone materials new energy materials black phosphorus and other

From 2024 to 2025 based on the continuation of existing projects more than 40 new technological innovation Sciences areas.projects will be initiated more than 30 new products and 20 new technologies will be added. The Company strives

to establish 2-3 provincial innovation platforms and 1 national innovation platform during the 15th Five-Year Plan

period. A total of 37 cooperative projects have been carried out. The two parties jointly built the Institute of Process

“Xingfa Green Manufacturing Joint R&D Center” and conducted technical research focusing

1600 2500 3200 Engineering Chinese The Company strives to have authorized patents by 2025 by 2028 and by 2030. on the technological upgrading of traditional industries such as energy conservation and Academy of Sciences

consumption reduction process intensification and process greening.The Company will receive 2-3 science and technology awards from provincial authorities and China Petroleum and

Chemical Industry Association by 2025; from 2026 to 2030 we will strive to receive 5-10 science and technology

awards from China Petroleum and Chemical Industry Association and at least 1 national science and technology Dalian Institute of

award from provincial authorities. Chemical Physics 2 cooperative projects have been carried out and mainly focus on the technical research of

Chinese Academy of bio-based materials and fluorosilicon materials.Sciences

Key Performance 6 cooperative projects have been carried out and mainly focus on optimizing the process of

Tsinghua University organosilicon and glyphosate products.The R&D investment of the Company was RMB 1.188 billion

accounting for 4.18% of the main business income.Wuhan Institute of

18 cooperative projects focusing on smart mining construction and beneficiation methods.

TechnologyQuzhou Research 2 cooperative projects jointly establishing the “Quzhou Research Institute of Zhejiang Univer-Institute of Zhejiang sity - Xingfa Group Joint R&D Center”. Currently technical research has been conducted in

University areas such as new silicone materials and wet process phosphoric acid.Technical Cooperation

Xingfa Group follows the principle of “mutual benefit complementary advantages cooperative innovation and joint development”

actively engages in technical exchanges and strategic cooperation with universities research institutions and industry partners. The

Company collaborates with universities which have top domestic research institutes to build R&D centers carry out joint talent

cultivation form technical research teams and focus on major original innovations critical core technologies and key technologies

for industrial strategic development. This involves research cooperation aimed at short-term medium-term and long-term goals:

solving current challenges pre-research for future goals and exploratory research.

93 942024 Environmental Social and Governance (ESG) Report

Signing of a Comprehensive Cooperation Framework Agreement with Huawei Case Study Major Technological Innovation Awards

On September 19 2024 the 9th Huawei

Connect Conference (HUAWEI CONNECT 2024)was held in Shanghai with the theme “Win-Win Project Name Awards Received CertificateIndustry Intelligence”. During the conference

the Company signed a comprehensive coopera-

tion framework agreement with Huawei Development of Advanced

Technologies Co. Ltd. (hereinafter referred to as Reaction Crystallization 2023 Second Prize of the

“Huawei”). The Company and Huawei estab- National Science and

lished comprehensive cooperation in areas such Systems for Li-ion Battery Technology Progress

as enterprise digital transformation planning Precursors and Intelligent Award

and consulting artificial intelligence large Manufacturing Solutions for

Awarding Authorities:

models intelligent manufacturing smart mining Premium Cathode Materials the CPC Central Committee and the State Council

smart parks talent training and information

infrastructure working together to promote the

deep integration of the chemical industry’s

business and digital technologies accelerating

the industrial digital and intelligent transforma-

tion and upgrading. Key Technologies and

Industrialization for Ultra-High 2024 First Prize of the

Purity Electronic Grade Sulfuric Science and Technology

Progress Award

Acid Production in Integrated

Awarding Authorities:

Circuit Applications China Petroleum and Chemical Industry Federation

Innovation Achievements

Major Technological Innovation Achievements

In 2024 Xingfa Group achieved three major technological innovation results: Industrialization of Continuous 2024 Second Prize of

"Key Technologies and Applications for Ultra-Pure Electronic-Grade Sulfuric Catalytic Synthesis of Hubei Provincial Science

Acid Production for Integrated Circuits" passed the technological achievement

Xingfa Group achieved 3 major techno- Glyphosate and New and Technology Progress

appraisal organized by the China Petroleum and Chemical Industry Federation

logical innovation results Technology for Award

with the overall technology reaching international advanced levels. Among Separation-recovery of Awarding Authorities:

them the directional conversion technology for trace low valence sulfides is at People’s Government of Hubei Provincethe international leading level. The Project titled “Industrialization of Continu- Glyphosineous Catalytic Synthesis of Glyphosate and New Technology for Separation-Re-

covery of Glyphosine" passed the technological achievement evaluation

organized by the Hubei Technology Exchange with the project technology

reaching international advanced levels with some parts at the international

leading level. The project titled "Key Technologies for Infrared Early Warning

Key Technologies for the 2024 Third Prize of

and Prevention of Rockburst in Deep Phosphate Mines" passed the technologi- Hubei Provincial Science

cal achievement evaluation organized by the Hubei Technology Exchange with Production of Methyl Vinyl and Technology Progress

the overall technology reaching international advanced levels and the infrared Silicone Rubber based on the Award

rockburst monitoring and early warning technology at the international leading Molar Amount of Vinyl Groups Awarding Authorities:

level. People’s Government of Hubei Province

95 962024 Environmental Social and Governance (ESG) Report

Standards Development Safety and Quality of Products and Services

The Company actively participates in the formulation of various standards committed to promoting industry development. It has led

or participated in the development of 108 standards including 2 international standards 36 national standards 41 industry

standards 28 group standards and 1 local standard.Standards Developed During the Reporting Period Xingfa Group follows the relevant legal regulations such as the Law of the People's Republic of China on Product Quality

and has established a complete quality management system that covers the entire product lifecycle ensuring that

each link meets national and industry standards.Name Number Effective Date During the Reporting Period the Company did not experience any significant responsibility-related quality incidents.Industrial Potassium Pyrophosphate HG/T 3591-2023 2024.02.01

General Method for Determination of Water-Insoluble

Matter in Inorganic Chemical Products GB/T 23948-2023 2024.06.01

Industrial Sodium Hypophosphite HG/T 3253-2023 2024.07.01

Determination of Lithium Carbonate Content in T/CI 313-2024 2024.03.28

Lithium Carbonate-Potentiometric Titration Governance

Determination of Magnetic Substance Content in

Lithium Carbonate T/CI 314-2024 2024.03.28

High Iron Phosphorus Ratio Iron Phosphate T/CI 315-2024 2024.03.28

Nano Iron Phosphate T/CI 316-2024 2024.03.28 licy Striving for Customer Innovation Pursuing Excellent

ality

Po Excellence First Driven Development

Dimethoxymethane (Industrial Grade) T/CASME 1525-2024 2024.06.20 Qu

Honesty and Quality Personalized Building a Centu-

Modified Attapulgite Phosphorus Removal Agent for

T/CI 433-2024 2024.08.01 Integrity First Service ry-Old BrandGlyphosate Waste Salt

Requirements for Assessment of Green Factory in the

Phosphoric Acid Industry HG-T 6179-2023 2024.07.01

Requirements for Assessment of Green Factory in the

Phosphate Industry HG-T 6172-2023 2024.07.01 To improve the quality management level the Company has formulated management

GB/T 19590-2023 2024.04.01 systems such as the Quality Management System and the Operation Guidelines for the Nano Calcium Carbonate

Management of Batch Numbers which control the entire process and all aspects of raw

Green Design Product Technical Specifications HG-T 6293-2024 2024.10.01 materials product quality and system operation management. With IoT technology

Monoammonium Phosphate Diammonium Phosphate and integrating systems such as SAP WMS and TMS the Company combines produc-

tion equipment data with production process data to establish a "one product one

code" product quality traceability system ensuring product traceability.The Quality Management Department as the department responsible for quality

Protection of Intellectual Property Rights management organizes and implements national policies and guidelines related to

quality improves system construction supervises and manages quality issues collabo-

To further regulate and strengthen the management of patents and technical papers protect the Company’s intellectual property rates with relevant departments to carry out comprehensive quality control and Quality Management System Certification

and prevent technology leaks the Company has formulated the Detailed Rules for Confidentiality in Technological Innovation and the strengthens the quality safety defense line.Notice on Standardizing the Patent Application and Technical Paper Publication Process. The Technology Center is responsible for the

Company's patent application and management work. The Company strictly follows the regulations for patent applications. No paper At the beginning of each year the Company signs the Quality Management Target

may be published before the patent application is filed for any technological innovation achievements eligible for patent protection. Accountability Statement with each responsible unit implementing a hierarchical

This ensures proper confidentiality of scientific and technological achievements and protects the Company’s R&D outcomes and responsibility system and strictly conducting assessments.intellectual property. The Company actively carries out system certification and has passed ISO9001 Quality

Management System Certification ISO22000 Food Safety Management System Certifi-

K关ey键 P绩erf效ormance cation IATF16949 Automotive Quality Management System Certification REACH BRC

MUI-HALA and 13 other international product certifications. During the Reporting

Total Number of Software Copyrights: 26 Period the Company conducted internal audits of the quality management system

179 with a total of 6 rounds of rolling internal audits conducted from January to December. Total Number of Registered Trademarks: 841 non-conformities and improvements were identified and rectified effectively

Food Safety Management System Certification

identifying quality risks and management gaps.

97 982024 Environmental Social and Governance (ESG) Report

Strategy

Dura-

Risk Impact on Potential

Dura-

Opportu- Impact on Potential

Description of Risk tion of

Type Value Chain Financial Countermeasures

Description of Opportunity tion of

nity Type Value Chain Financial CountermeasuresImpact Impact Impact Impact

As one of the largest phospho-

rus-based fine chemical enterprises in

Quality non-conformities could Increase in Strictly control the quality of

Short China the Company leads and partici-

lead to administrative penalties Operations operating outbound products to ensure they

term pates in the formulation of multiple

causing severe negative impacts. costs meet national standards. national and industry standards. In the

process of standard-setting the

Increase in

Technological Make good market forecasts for Company fully reflects its technical Medium

Operations operating

Opportunities term products and actively develop new advantages and quality requirements

income

Increase in products.Technology guiding the improvement of product

Risks Foreign objects are found in operating costs Strict control of foreign objects quality in the industry. This also Short O p e r a t i o n s

products leading to customer and decrease in provides clearer directions and norms

term downstream during the production process.complaints or even claims. operating revenue for the Company's product production

and quality control helping to further

enhance product quality and stability.Formulate post operation

Unstable product quality with Reduction in

procedures; The Company has laid out its new

some products failing to meet Medium Operations Operating

term Strictly implement the process energy materials industry in line with customer requirements. Revenue

ratios. the development trend of the new

energy market which has high

demands for product quality and

Market performance. The Company can use Long Upstream Increase in Follow market laws accelerate

Opportuni- term Operations operating

Damage to external packaging Increase in Upstream this opportunity to enhance its product iteration speed actively

Short Strengthen daily inspections of ties Downstream income

during transportation leading to operating costs Operations production technology and quality introduce the 3.5th generation

term outsourced parties.customer complaints or claims. and decrease in Downstream control capabilities create high-quali- products to the market and prepare

operating revenue ty new energy material products and for the R&D of the 4th and 5th

Supplier further increase its market share and generation products.Risks brand influence in the new energy

sector.Increase in

Non-conforming materials are Short Upstream and operating costs Strictly control the inspection of

causing product quality issues. term operations and decrease in raw materials upon entry. Strengthen the responsibility for

operating revenue Strict quality control helps the quality management goals in produc-

Company attract more high-quality tion units ensuring full coverage of

customers promote continuous Increase in the Quality Management Target

Reputation Long

improvements in product and service Operations operating Accountability Statement; establish a

Opportunities term

Make accurate product market quality and create a positive cycle income customer service system covering Market Inaccurate market forecast leading Short Reduction in

Risk Operations Operating forecasts and actively develop new

where brand and quality mutually multiple channels such as customer

to unsold and overstocked term

Revenue products. promote each other. service hotlines websites WeChat products. official accounts and emails.

99 1002024 Environmental Social and Governance (ESG) Report

Impact Risk and Opportunity Management

Quality Management Goals

In accordance with the “Risk and Opportunity Control Procedure” the Company comprehensively identifies reviews improves andupdates activities within the scope of quality management and food safety systems. Production units prepare their “Risk and Oppor- First Pass Yield: Differentiated first-time pass rate targets are set for various types of products.tunity Assessment Reports” based on the review results.Quality Incidents: No incidents of Category IV or above fewer than 2 incidents of Category V.Risk and Opportunity Management Process

Food Safety Incidents: Zero food safety incidents.Risk Each department (unit) should fully identify the risks and opportunities in their respective manage-Identifica- ment activities and establish the “Risk and Opportunity Assessment Form. Annual Key Work: Complete the annual key tasks on time and with quality.tion

System Operation: Ensure the management system operates effectively and is continuously improved.Risk Risk evaluations are conducted based on legal regulations product and customer requirements

Analysis and property loss product quality and other dimensions analyzing the severity of risks and occurrence

Assessment frequency to determine risk coefficients. The risk level is determined and measures are taken by the

coefficient.Risk The Company reduces or eliminates risks through risk acceptance risk reduction risk avoidance and

Response risk transfer. Product Quality Management Measures

Quality Training

Risk

Monitoring

and At least one risk and opportunity review should be conducted annually to verify their effectiveness The Company regularly conducts quality training through various training formats to raise the quality awareness of all employees

Improve- prevent and reduce adverse impacts. creating a good atmosphere of striving for excellent quality across the entire company laying a solid foundation for the Company’s

ment sustainable development and enhanced market competitiveness.Training on Quality Management Team Case Study

From April 25 to 26 2024 the Company

Metrics and Targets organized the training on quality management

team at the Training Center to enhance

The Company always adheres to the concept of excellent quality combining market trends and actual conditions to formulate and employees’ quality awareness and improve

strictly implement quality management goals. Under the guidance of quality management goals the Company continuously optimizes practical quality management skills.production processes and strengthens quality control. This training focused on aspects such as quality

During the Reporting Period the Company’s quality management goals have been achieved. management systems quality control methods

and quality improvement tools. The employees

gain a deep understanding of the core concepts

and practical techniques of quality manage-

K关ey键 P绩erf效ormance ment improving their quality awareness and

skill levels by theoretical explanations case

analysis group discussions and hands-on

Product Qualification Rate: Over 98.0% practice.

101 102Product Qualification Rate: Over 98.0%

2024 Environmental Social and Governance (ESG) Report

Training on Quality Trustworthy Group Case Study Product Recall

From August 5 to 6 2024 to further promote To ensure that non-compliant products and unqualified services during transportation are effectively identified and controlled the

the building of quality trustworthy group and Company has developed the “Non-conformance Control Procedure” to manage non-compliant raw materials intermediate products

improve product quality Xingfa Group and final products preventing quality incidents.organized training on a Quality Trustworthy The Company has established a Product Recall Leading Group as a temporary organization to handle product complaints and product

Groups at the Training Center. The training recall matters. Upon receiving and confirming complaint feedback the Company handles it according to regulations in a timely

included interpreting the requirements of the manner to minimize the harm caused. The Recall Leading Group organizes relevant department personnel to carry out simulated“Criteria for Building Quality Trustworthy exercises of the product recall plan in each year; evaluates the recall process and makes improvements to address identified issuesGroup” (T/CAQ 10204-2017) and providing then ensuring the effectiveness of the procedure.guidance on QualityTrustworthy Group

construction. By combining excellent case

studies the training helped employees fully Recall Process

understand the importance of building this

group and promoted team development within

the Company.Information Acceptance

After receiving and confirming complaint feedback

from distributors or customers the information is

K关ey键 P绩erf效ormance reported to the recall team leader and the Quality

Management Department analyzed for causes and

Participants in Quality Traning: 451 Person-times Investigation and Analysis

investigated and processed.Total Duration of Quality Training: 28 Days (Closed Training).The relevant product production process information is

Training on Quality: 9 Sessions comprehensively analyzed; and promptly reportand

the production quantity of the complained product as

well as the quantity entering the sales process.Product Recall

Quality Inspection When there is sufficient reason or evidence to indicate

that the Company’s sold products have defects or

serious food safety issues an emergency recall must beTo further improve product quality and establish a better reputation in the market Xingfa Group has developed the “Inspection initiated to prevent harm or to control the consequenc-Management System” and the “Verification and Certification Product Consistency Control Procedure” to standardize the inspection Product Treatmentes of any already occurred harm.of raw materials semi-finished products and finished products and the management of inspection personnel. Through the develop-

ment of the Laboratory Information Management System (LIMS) project the Company centralizes and digitizes the management of Disposal methods are formulated based on the issues

master data such as test items test methods and test standards and enhances the efficiency of testing and data accuracy. During identified in the product. The production unit’s

the Reporting Period the Company’s product quality and food safety internal inspections were all qualified. warehouse must store the recalled products from

market in a designated storage areaseparately isolated

The Company strengthened its cooperation with inspection agencies and hired professional third-party organizations to conduct

clearly marked with prominent non-conforming labels

quality sampling inspections on the Company’s products the purchased raw and auxiliary materials and issue test reports. During the

and managed by designated personnelto prevent

Reporting Period all entrusted inspections were qualified.contamination of other qualified products or the

environment. If after evaluation the products can be

reworked within the production system the production

unit must organize the rework process. If rework is not

K关ey键 P绩erf效ormance feasible after evaluation the products shall be down-

graded or scrapped in accordance with established

Spot Inspections by Entrusted Third-Party Agencies: 239 Times procedure with relevant records properly maintained.

103 1042024 Environmental Social and Governance (ESG) Report

Protection of Customers’ Rights And Interests Sustainable Supply Chains

Customer Service Management

In accordance with the “Basic Standard for Enterprise Internal Control” the “Articles of Association” and other applicable laws and Xingfa Group continues to deepen its sustainable supply chain development working closely with suppliers and priori-

regulations the Company has formulated the “Customer Management System” to fully control the entire process of customer tizing environmentally compliant and socially responsible partners to ensure a green and stable supply of raw materi-

management including customer information sales activities customer service customer evaluation and statistical analysis. als. The Company actively adopts environmentally friendly transportation methods increases loading rates to reduce

carbon emissions and builds a sustainable supply chain with resilience and green characteristics promoting the simul-

The Marketing Department as the department is mainly responsible for customer management is also related to formulating and taneous development of economy and ecology.improving various management systems. Also supervise and inspect the customer management work of each business department

and lead the annual evaluation customer satisfaction survey and other activities.To improve customer satisfaction and standardize complaint handling the Company has developed the “Customer SatisfactionMonitoring and Measurement Control Procedure” and the “Customer-Related Process Control Procedure” to better understand and

meet customer needs as well as improve service quality and operational efficiency.GovernanceComplaints via To standardize supplier and customer management in accordance with relevant national laws and regulations and the “Articles ofCustomer Service Association” the Company has formulated management systems such as the “Procurement Management System” the “Supplier andSystem Customer Management System and the Measures for Supplier Evaluation” which clarify supplier admission standards cooperation

Confirmation by Communication and Investigation by processes and risk management measures to achieve supplier lifecycle management through digital management tools. The

Marketing Manage- Feedback to Customers Relevant Depart- Procurement Department is in charge of procurement management-related work and is responsible for the procurement of chemical

ment Department Based on Analysis and ments raw and auxiliary materials and packaging.Investigation Results

Complaints to To strengthen procurement process management the Company holds procurement personnel accountable. For personnel involved

Salespersons in non-compliant operations or who fail to implement responsibilities during the procurement process salary deductions are applied

based on the circumstances.During the Reporting Period the Procurement Department continuously strengthened employee training focusing on improving

awareness of laws and regulations responsibility and business capabilities building a high-quality and professional procurement

Customer Complaint Handling Process team.Customer Service Hotline: 400 060 0141

Customer Privacy Protection

The Company has implemented digitalization and intelligence in the customer service process integrating CRM Customer Master

Data with the OA system.Standardize personnel usage permissions to ensure that important customer information can only be

viewed after strict approval. This improves management efficiency while safeguarding customer privacy. During the Reporting Period

no customer information leakage incidents occurred in the Company.

105 1062024 Environmental Social and Governance (ESG) Report

Strategy

Dura-

Risk Impact on Potential

Dura- Potential

Description of Risk tion of Financial Countermeasures Opportu- Description of Opportunity tion of Impact on Type Financial CountermeasuresImpact Value Chain Impact nity Type Impact Value Chain Impact

Some important raw materials The Company can leverage its rich

experienced supply disruptions due to Establish corresponding safety stock mineral green power resources and a

unforeseen events such as safety Increase in based on the monthly demand for raw well-established fine chemicals

Supplier Risks accidents and environmental produc-

Short

Upstream operating materials and expand procurement industrial chain to achieve efficient

tion restrictions which directly affect term costs channels with a multi-point layout to Opportunities resource utilization and enhance The Company has built and put into

the continuity of the group’s produc- avoid single-channel procurement. for Industrial product added value thereby increas- Upstream

Reduction in production iron phosphate and

tion and may lead to order delivery Long operating

Chain ing corporate profitability and and lithium iron phosphate actively

delays. termpromoting the coordinated develop- operations costsExtension developing the lithium battery materi-

ment of various business sectors als industry.within the group. This will reduce

Adopt a combination of multiple

procurement costs and improve the

transportation methods such as

operational efficiency of the entire

shipping trucking and rail

supply chain.stipulate the terms of goods

The transportation of chemical transportation in procurement

products and raw materials is easily contracts and supervise logistics

Transporta- affected by factors such as weather providers to implement hazardous

tion Risk traffic congestion and road chemical transportation regula- Deepen long-term stable strategic

conditions leading to transportation tions and track contract execution; cooperation with high-quality

delays. Additionally some hazardous suppliers to jointly resist market

Cooperate with the Company’s

chemicals exist safety risks such as fluctuations and risks ensuring stable

Increase in logistics management depart-

leakage and explosions during raw material supply and quality Short Strategic partnerships have been

Upstream operating ments to strengthen the supervi-

transportation. In the event of an improvement while reducing term Strategic Upstream Reduction in established with some bulk material costs sion of hazardous chemical Long

accident it could result in cargo loss procurement costs through collabora-

transportation safety conduct Cooperation

and operating suppliers and in the future the

environmental pollution or even tion. Strengthen cooperation with

term

regular safety inspections of Opportunities

operations costs Company plans to partner with more

casualties causing significant downstream customers to jointly

logistics partners urge logistics high-quality collaborators.economic and reputational losses for develop and customize products

companies to conduct vehicle

the Company. improving customer satisfaction and

safety checks and personnel safety loyalty stabilizing sales channels and

training and further implement achieving coordinated development

safety responsibility to eliminate across the entire supply chain.potential hazards at the early stage

and ensure that no major safety or

environmental accidents occur

throughout the year.Strengthen digital technologies to

enable real-time data sharing and

Global economic conditions industry Strengthen upstream and The Company has broken down the collaboration across all processes of

competition patterns and other downstream market analysis of barriers between the Alibaba Procure-the supply chain thereby responding

factors are constantly changing required raw materials grasp ment Cloud Platform SAP OA and Opportunities promptly to market changes and risks

leading to unstable market demand procurement opportunities by WMS systems according to the for Digital accurately forecasting market Upstream Reduction in

for chemical products. If market analyzing market trends and Long business process sequence enabling Supply Chain demand and raw material supply and operating

Market Risk demand changes can not be

Increase in

Long combining industry patterns and

term online integration and traceability of

Transforma- conditions optimizing inventory operations costs

accurately and promptly grasped the Upstream operating expand channels and methods for various documents; as well as term tion management effectively reducing

unsold products or supply shortages costs obtaining market information such full-process digital handling improv-inventory costs and capital occupan-

will happen which will impact the as effective communication with ing the standardization of procure-cy and improving the operational

Company’s sales performance and senior companies in the industry ment process management and work efficiency of the supply chain and

profitability. participating in various forms of efficiency.capital turnover speed.industry meetings association

meetings etc.

107 1082024 Environmental Social and Governance (ESG) Report

Impact Risk and Opportunity Management Management Measures for Supply Chain

To prevent and control supply chain risks and avoid major risks such as supply chain disruptions the Company continuously improves Supplier Management

the supply chain risk and opportunity management process formulates diversified response strategies and enhances its risk

management level. For suppliers of purchased raw materials and packaging the Company conducts annual evaluations and assessments implementing

a tiered management system. Scoring is based on dimensions such as qualification level evaluation results winning bid prices

Risk and Opportunity Management Process product quality and after-sales service with four levels: A (Excellent) B (Qualified) C (General) D (Eliminated). Additionally safety

environmental protection and integrity requirements are imposed on suppliers during daily procurement activities and procurement

personnel are required to operate with integrity. This promotes greener more compliant and transparent procurement practices.Risk In line with the industry background and raw material fluctuation trends the Company conducts risk

Identification and opportunity identification across the entire procurement process.For logistics carriers the Company has developed a comprehensive management process to ensure supply chain safety and sustain-

ability.Admit- The Company must have independent legal person status be able to independently bear relevant legal

Risk Analysis Analyze the causes mechanisms interrelationships of risk factors as well as the transmissibility and

tance responsibilities and hold the necessary legal qualifications such as a business license road transport

Criteria

and Assess- impact of risks in the supply chain assess the likelihood of risk occurrence the severity of its impact permit and other certificates prescribed by national or industry regulations.ment and classify the risks.Qualifica-

tion Review the provided materials and screen the carriers excluding those that do not meet the requirements.Risk Develop targeted preventive measures based on risk levels. Review

Response

Risk Conduct periodic supervision and inspections covering content such as qualifications and licenses on-site Conduct regular effectiveness evaluations of the measures to ensure risks are controllable. Supervi-

Monitoring sion and management safety protection and emergency plans. Timely feedback is provided for any identified

inspec- issues and carriers are ordered to rectify within a set deadline. If the carrier still does not meet the access

tion requirements after rectification they will be eliminated according to regulations.Metrics and Targets

Conduct a statistical analysis on the carriers’ conditions such as qualifications system management

During the Reporting Period the Procurement Department focused on the Company’s production and operation goals actively Annual on-site evaluation (letter investigation) results and generate an evaluation report Require carriers to

responding to market fluctuations continuously optimizing procurement management and concentrating on achieving annual goals Evalua- rectify non-conformity within a deadline and re-evaluate the effectiveness of the rectification. Compile an

to ensure the stability of the supply chain. tion annual review report and sign contracts with qualified carriers and eliminate non-qualified carriers

according to applicable regulations.Supply Chain Management Goals and Achievements

K关ey键 P绩erf效ormance

Stable growth in procurement scale. A total of 8.8739 million tons of raw and auxiliary materials were procured Total Number of Suppliers: 269 Number of Suppliers Passing the Quality Management System Certification: 64

throughout the year involving 158 varieties with a total procurement amount of RMB 12.254 billion.Number of Suppliers Passing the Environmental Management System Certification: 44

There is a significant increase in direct procurement from manufacturers. By strengthening the source supply and

optimizing procurement channels the direct procurement rate from manufacturers reached 76.49% Number of Suppliers Passing the Occupational Health and Safety Management System Certification: 43for the year

an increase of 13.79 percentage points compared to 2023. The number of traders in 2024 was 80 a reduction Signing Rate of Integrity Agreement by Supplier: 100%

of 53 compared to 2023 significantly reducing intermediary costs and improving supply chain efficiency.Number of Incidents with Significant Risks and Impacts in the Supply Chain: 0

Note: The statistical scope is limited to bulk raw and auxiliary materials directly purchased by the head office of the joint-stock company.Notes: The statistical scope is limited to the head office of the joint-stock company Yichang Park and Yidu Park.

109 1102024 Environmental Social and Governance (ESG) Report

Digitalization Information Security Management System

To ensure the efficient operation of the entire procurement process the company has integrated the 1688 Procurement Cloud

Platform SAP OA system and WMS system in alignment with the business workflow. By breaking down system barriers documents

such as requisition forms price comparison sheets purchase orders and contracts warehouse receipts and invoices can be digitally

integrated and tracked online. This enables end-to-end digital management of orders acceptance and settlement thereby enhanc-

Protecting Ensure the security and integrity of the Company’s sensitive information and data preventing ing the standardization and efficiency of procurement process management. Information unauthorized access disclosure tampering or destruction.Assets

Comply with national laws and regulations industry standards and information

Enhancing security requirements in customer contracts to ensure lawful and compliant

Compliance business operations.Information

Security

Manage-

ment Goal Raising

Planning Employee Improve all employees’ information security awareness and skill levels through

Awareness training and education fostering an information security culture.Continuous Establish a mechanism for continuous improvement regularly evaluate and audit the

Improve- information security management system promptly identify correct and improve any

ment issues.Procurement Cloud PlatformThe Company adheres to the information security management philosophy of “full participation prevention first continuous improve-ment and compliant operation.” It has established the Information Security Management System the Operating Guidelines for

Information Security and other management measures. Through classification of information access control password management

system security network security physical security and other management practices the Company has built a solid data security

Information Security and Privacy Protection defense.The Information Center as the department in charge of information security is fully responsible for managing information security. It

assesses and responds to information security and privacy risks and continues to improve the information security management

system. By the end of the Reporting Period both the Company’s OA system and official website had passed the Cybersecurity Classi-

Xingfa Group strictly complies with laws and regulations such as the Cybersecurity Law of the People’s Republic of fied Protection (Level II) certification.China the Data Security Law of the People's Republic of China and the Personal Information Protection Law of the

People's Republic of China. The Company has established and improved an information security management system

continuously strengthening information security infrastructure and using advanced technological means to ensure

the safety of the Company's information assets.During the Reporting Period the Company experienced no data security incidents.Cybersecurity Classified Protection Certification

111 1122024 Environmental Social and Governance (ESG) Report

Information Security Management Measures

Training on Information Security Awareness Case Study

Classifica- Classify and manage data according to classification standards. Take different protective measures for

tion and different classifications of data and safeguard important data through access control encrypted

Manage-

storage secure transmission etc. On February 20 2024 the Company organized relevant personnel to participate in the training on information security ment awareness which thoroughly analyzed the four aspects of basic understanding of information security the importance of

information security correct understanding of information security and awareness enhancement effectively raising

employees' information security awareness.Apply new technologies to build data platforms and deploy multi-layered network defense systems such

as firewalls intrusion detection/prevention systems (IDS/IPS) and antivirus software to prevent

unauthorized access and attacks

OA Emergency Drill Case Study

Behavior Implement strict access control policies and perform refined management of employee access permis-

Control sions to ensure that only authorized personnel can access sensitive information and systems.On March 25 2024 Xingfa Group conducted an emergency drill to ensure the security and stability of the OA system and

Set up access control systems surveillance cameras etc. Encrypt important equipment to prevent data prevent information system risks based on actual needs. The drill included shutting down one application server and one

from being illegally accessed if the equipment is lost or stolen. database of the OA production system without interrupting operations verifying the system's operating status operational

continuity and data integrity restoring backup data to a test database and pointing the OA test system's data source to

the restored database to verify related situations etc.Risk

Assessment Regularly conduct risk assessments of the Company’s information system identify potential security

and threats and vulnerabilities and implement corresponding corrective measures for any issues.Response

K关ey键 P绩erf效ormance

Security Establish a security auditing and monitoring system to monitor and audit employees' operational behav-

Auditing Participants in Training on Data Security | Customer Privacy Protection: 12756 Person-times

and iors system operation and network traffic in real-time and promptly identify and address security

Monitoring issues. Coverage Rate of Training on Data Security | Customer Privacy Protection: 85%

Per Capita Training Duration of Training on Data Security | Customer Privacy Protection: 1 Hour

Regularly back up key data to ensure rapid recovery in the event of data damage or loss.Backup

and Regularly test key data hardware equipment and systems.Emergency

Manage- Develop emergency response plans and recovery procedures conduct regular emergency drills and offer

ment training sessions during the Reporting Period to ensure a swift response and business operation recovery

in case of information security incidents.Technical Engage in security trend and technology sharing case analysis and experience exchange activities with

Coopera- information and data security vendors such as IPGuard and Sangfor; sign related contracts with IPGuard

tion to jointly promote the enhancement of information and data security.Awareness Require all employees to participate in online education and offline training courses and tie the training

Enhance- results with performance assessment of employees

ment

113 11404 SocialResponsibility

Fulfillment

Co-creating a Better Future

SDGs Responded in this Chapter

Key Achievements in 2024

Material ESG Topics Covered in this Chapter

□ Protection of Employees' Legal Rights and Interests Employees of Social InsuranceTotal Number of

Employees Ethnic Minority

Coverage Rate

□ Employee Training and Development 100%

□ Occupational Health and Safety 14121 778 Persons Investment in

□ Rural Revitalization Employees with Disabilities Employee TrainingPersons

□ Social Contribution 40 Persons RMB 21024700

115 1162024 Environmental Social and Governance (ESG) Report

Protection of Employees’ Rights and Interests

Xingfa Group strictly complies with the Labor Law of the People's Republic of China and other laws and regulations. By 83 384

establishing a comprehensive system the Company provides full welfare protection such as career development plans

health benefits and salary incentives safeguards employees’legal rights enhances their sense of belonging and work 3891 1782

motivation and regularly carries out various training activities to actively reserve high-quality talent for the Company’s

development. In terms of social responsibility the Company vigorously supports the rural revitalization strategy Number of 710 Number of

actively participates in social charity activities and demonstrates a strong sense of social responsibility and commit- Employees by Employees by

ment. Gender Specialty(Persons) (Persons)

1023011162

Male Female Manufacturing Sales

Employee Recruitment and Employment Technology Finance

Administration

The Company adheres to the principles of openness fairness and justice upholds an equal employment philosophy and has devel-

oped the Human Resources Management System and the Statement of Recruitment and Hiring Procedures Compliance and Fairness

Transparency to regulate the employee recruitment process in accordance with applicable laws and regulations. The Human Resourc-

es Department as the department responsible for recruitment management is mainly responsible for personnel demand analysis 51

publishing recruitment information resume screening interview arrangements background checks and onboarding arrangements. 1714 3137 606

Key Performance

Number of Number of 3576

Employees by Employees by

Age Educational3771 Background

Total Number of Employees 14121 Signing Rate of Employment Contracts 100% (Persons) 5499 (Persons)9888

Under 30 (exclusive) years old Doctoral Degree Master’s Degree

30 (inclusive) to 40 (exclusive) years old Bachelor’s Degree College Degree and Below

40 (inclusive) -50 (exclusive) years old

9 185 19 50 years old or above

996

Number of Number of

Employees by Employees by

Region Job Level

(Persons) (Persons)

13106 Xingfa Group has a diversified recruitment channel covering online recruitment platforms campus recruitment social media recruit-13927 ment and more ensuring it can attract and select outstanding talent from various backgrounds injecting continuous fresh blood and

vitality into the Company's sustained development.Chinese Mainland Directors Supervisors and Officers The Company actively responds to national policies upholding an equal and inclusive recruitment philosophy prioritizing the recruit-

(Excluding Independent Directors) ment of qualified veterans and providing employment opportunities for people with disabilities.

Hong Kong Macau and Taiwan

Middle Management

Overseas Regions

Grassroots Employees

117 1182024 Environmental Social and Governance (ESG) Report

Recruitment Channels Diversity Equality and Inclusion

Social Recruitment Campus Recruitment

University Cooperation: Establishing university-enterprise The Company in accordance with the national Labor Law of the People's Republic of China the Regulations on Prohibiting the Use of

Online Recruitment: BOSS Zhipin cooperation relationships with several well-known domestic Child Labor and the Provisions on Special Protection for Juvenile Workers ensures that the age of applicants complies with the national

51Job yingjiesheng (www.ying- universities including comprehensive universities and legal labor age standards avoiding the hiring of child labor. The recruitment team undergoes regular anti-discrimination training and

jiesheng.com) institutions of science and technology. any form of employment discrimination is strictly prohibited. To ensure that the Company culture policy orientation and employee

On-site Recruitment: Career Fairs behavior align with human rights standards the Company continues to strengthen its ability to respect differences and promote Job Fairs: Participating in career fairs organized by universi-

Industry Exchange Meetings inclusiveness striving to create a fair harmonious and inclusive working environment.ties directly promoting the corporate culture and recruit-

ment needs to student groups. During the Reporting Period no labor discrimination incidents occurred within the Company.Online Recruitment: Utilizing multiple online recruitment

platforms such as 51Job yingjiesheng (www.ying-

jiesheng.com) etc. Key Performance

Number of Employees with Disabilities: 40 Number of Employees of Minority Nationalities: 778

Campus Presentation Case Study

There are74 ethnic minority employees in the management team.Xingfa Group actively conducts campus recruitment widely

attracting talented individuals. In 2024 the Company

recruited 470 talents with a bachelor's degree or above

through campus recruitment from 148 domestic and

international universities such as Fudan University Wuhan

University University of Beijing Aeronautics and Astronau-

tics Huazhong University of Science and Technology.Accessible Facilities

The Company has set up accessible pathways and elevators and other facilities to meet the needs of special groups demonstrating

the Company’s active practice of the principles of equality and inclusion.

487588

Number of Number of

New Employees New Employees

by Gender by Recruitment

(Persons) Channel(Persons)

19551854

Female Male Social Recruitment

Campus Recruitment

Division of New Employees

Key Performance

Number of New Employees: 2442

Accessible Elevator Accessible Ramps

119 1202024 Environmental Social and Governance (ESG) Report

Remuneration and Benefits Employee Stock Ownership Plan

During the Reporting Period the Company implemented an employee stock ownership plan to unleash employees' potential

Xingfa Group has established a fair and reasonable compensation and benefits system as well as a scientific performance assessment strengthen the talent base and enhance employees' sense of belonging and responsibility providing momentum for the Company's

mechanism. In the Company’s compensation system employee salaries mainly consist of base salary and performance-based pay. stable development.The Human Resources Department uses the “271” assessment principle to evaluate employees based on their performance in areas

such as work attitude work quality and team building. This approach fully stimulates employee enthusiasm and innovation promotes

personal growth and supports the achievement of the Company’s strategic and operational goals.Number of Employees Total Number of Shares Held Percentage of Total Share Capital of the Listed Company

Key Performance

1257 18068253 Shares 1.64%

Proportion of Employees Receiving Regular Performance and Career Development Assessment:100%

Employee Working Hours

Employee Benefits

The Company implements the standard working hours system according to the Labor Law of the People’s Republic of China. Due to

Xingfa Group consistently adheres to the concept of collaborative development between employees and the Company placing equal seasonal influences and the uneven nature of peak and off-peak seasons in power generation and phosphate mining units some

emphasis on improving employee benefits and enhancing business performance. The Company strictly follows national regulations employees are unable to apply the standard working hours system and a comprehensive working hours system is implemented.ensuring full payment of “five insurances and one fund” for employees thus solidifying the social security foundation for employees.We also have established a series of diversified welfare policies covering health care career development support living subsidies By adopting a diversified working hours system the Company ensures the legal rights of employees enhances job satisfaction and

and other aspects to enhance employees' sense of belonging and loyalty to the Company. production efficiency and promotes long-term development in a stable and orderly rhythm building more harmonious and sustain-

able labor relations.National Requirement Policy-Based Welfare Details

Basic Pension Insurance Basic Medical Insurance Work-related Injury

Social Security (6 items) Insurance Maternity Insurance Unemployment Insurance Provident Fund

Health Allowance Underground Allowance Duty Allowance Car Reform Democratic Governance

National Allowance Heatstroke Prevention Subsidy Only Child Allowance Review

Mandatory Welfare Allowance and Subsidy (12 items) Lecture Subsidy Phone Subsidy Construction Site Allowance Team Leader

(22 items) Allowance (Safety Responsibility Allowance) Relocation Allowance Second The Company takes a highly responsible attitude toward employees’ rights and diligently fulfills the responsibilities of the employee

Child Incentive Allowance representative assembly. It actively builds a democratic management system centered around the employee representative assembly.Nursing Care Allowance During Work-related Injury Hospitalization Through the continuous and steady establishment of key democratic management platforms such as the representative assembly

Benefits (4 items) One-Time Disability Employment Subsidy Employee Recuperation Holiday and trade unions the Company promotes democratic management towards standardization institutionalization and rule of law

Supplies comprehensively safeguarding employees’ legal rights.Social Security (2 items) Pension Supplementary Medical Insurance

The Company organizes the employee representative assembly in an orderly manner seriously handles and addresses representa-

National Night Shift Allowance Director and Supervisor Allowance Mentor-Mentee tives' proposals with a proposal response rate of 100% and a satisfaction rate of over 95%. The employee representative assembly

Encouraging Welfare Allowance and Subsidy (7 items) Allowance Skill Allowance Meal Allowance Transport Subsidy Blood

Donation Subsidy approved important projects such as the Ten Safety and Environmental Protection Bans of Xingfa Group corporate pensions and (14 items) supplementary medical insurance employee handbook employee employment contracts and collective employment contracts fully

Major Illness Assistance Subsidies for Workers in Difficulty Heatstroke

Benefits (5 items) Prevention Supplies Health Checkups Work Clothes (Non-PPE Clothes) demonstrating the key role of democratic management in corporate governance.Company Medical Subsidy Operation and Maintenance Subsidy Internal Auditor

Self-Defined Welfare Allowance and Subsidy (6 items) Subsidy Housing Subsidy Subsidy for Children Going to University Talent

(6 items) Allowance Key Performance

Employee Benefits

Projects Reviewed and Approved at the Employee Congress: 3 Items

Key Performance

Projects Reviewed and Approved by the Trade Union: 6 Items

Social Insurance Coverage Rate: 100%

Proportion of Trade Labor Members to In-Service Employees: 100%

121 1222024 Environmental Social and Governance (ESG) Report

Employee Communication Channels

The Company attaches great importance to communication and interaction with employees. Through employee forums the employ-

ee representative assembly Xingfa Group News radio broadcasts bulletin boards and the OA office system information is transmit- Number of Retired Employees by Age (Persons) Number of Retired Employees by Gender (Persons)

ted in a timely manner and employees’ demands are widely collected. The Company’s management regularly conducts in-depth

research on the production frontlines holding on-site meetings multiple times to analyze and resolve production and operational

difficulties as well as challenges employees face in their work and daily lives. This approach effectively resolves employees’ concerns

fully stimulates their enthusiasm for work and fosters a positive corporate atmosphere. 50 years old or above 23

40 (inclusive) to 50 Male 994

(exclusive) years old 130

30 (inclusive) to 40

Resolution of Labor Disputes (exclusive) years old

407

Female 249

Under 30 683

Acceptance and Registration (exclusive) years old

The Company has established the Rules of Work of People’s Mediation

Committee and set up the People’s Mediation Committee of Xingfa Group 0 100 200 300 400 500 600 700 800 0 200 400 600 800 1000 1200

to define responsibilities work principles the rights and obligations of

mediation applicants and the mediation process. In the event of a labor Fact Investigation

dispute that has not yet been submitted for arbitration the Company Number of Employees Resigned

prioritizes negotiation with the employee striving to continue fulfilling the

employment contract or mutually agreeing to terminate the contract. If no

agreement can be reached and the Company is required by law to termi- Consultation and Mediation

nate the employment contract except when the employee has seriously

violated rules and regulations or other statutory situations the Company Employee Turnover Rate by Age Employee Turnover Rate by Gender

will notify the union in writing and obtain its written consent. The Company

will notify the employee in writing 30 days in advance and proceed with the

employee's departure procedures within the prescribed time providing a Follow-up Processing 50 years old or above 4.66%

resignation certificate. During the Reporting Period the Company and its 82.79%

subsidiaries had 19 labor dispute cases 18 of which have been resolved 40 (inclusive) to 50

16.58% Male

mainly through mediation. (exclusive) years old

Case Processing and Archiving

30 (inclusive) to 40

(exclusive) years old 21.93%

Female 17.21%

Under 30 56.83%

Labor Dispute Handling Process (exclusive) years old

0%10%20%30%40%50%60%70%80%0%10%20%30%40%50%60%70%80%90%

Resignation Management

Employee Turnover Rate

Xingfa Group has established the Measures for Handling the Performance of Employment Contracts clearly outlining various scenarios

and strategies for dealing with employment contract performance safeguarding the legitimate rights of both parties and ensuring

strict contract compliance. The Company has launched the Explanation to Employee Resignation/Termination Procedure which

outlines the complete process for an employee’s normal resignation or dismissal due to special circumstances. The procedures from Key Performance

application and approval to subsequent formalities are clearly defined and standardized ensuring that all operations are legal

compliant fair and just maintaining a good relationship between the Company and its employees and supporting the Company’s

stable operations. Employee Resignations: 1243 Persons

Overall Employee Turnover Rate: 8.8% a decrease for 3 consecutive years

123 1242024 Environmental Social and Governance (ESG) Report

Care for Employee Measures for Female Welfare

The Company places high importance on employee care. On the one hand it proactively visits and offers support to employees in Through employee representative meetings

difficulty providing warmth and assistance. On the other hand it actively organizes a variety of employee activities to enhance mutual seminars and exchange sessions the Company Health insurance is purchased for all female

understanding and trust offering employees a good platform to relieve work stress and refresh their minds and bodies fostering a listens to female employees’ proposals and employees and assistance is provided to

positive vibrant working environment. discusses and implements the adopted propos- employees who are ill to help them with claims.als after the meetings.Employee Sports Meeting Case StudyOn May 12 2024 the “2024 Xingfa Group Employee SportsMeeting” opening ceremony was held at the Minzu Sports A gynecological health check-up is conducted

Hall in Yuyangguan Town of Wufeng County. The sports for female employees every two years.meeting included 8 categories and 22 individual events

such as basketball and badminton. During the competition Policies related to the second and third child

athletes faced challenges and fought hard referees upheld births are introduced and employees giving

fairness and justice staff performed their duties with birth to a second or third child are given a

dedication and attentive service and cheerleaders provided one-time reward. Female employees arepolite encouragement. The event being “well-themed entitled to 1 year of maternity leave per child.civilized and wonderful safe and successful” displayed

excellent sportsmanship and ethical conduct and realized

both sporting success and spiritual civilization.International Women’s Day Event Case Study

Visit to Frontline Marketing Personnel Case Study

To further enhance the combat effectiveness creativity and cohesion of grassroots women’s organizations and to fully

utilize the role of grassroots women’s organizations the Company organizes a series of celebratory activities for Interna-

On January 31 2024 a member of the Xingfa Group Party tional Women’s Day.Committee the Vice President of the Company the Party

Secretary and the Chairperson of the Trade Union along

with the relevant staff from the Trade Union and the Party

Committee visited and extended their care to marketing

representatives who fearlessly took risks and bravely went

abroad to explore new markets during the pandemic. During

the visit the team listened attentively to the marketing

representatives’ work experiences and difficulties overseas

highly praised their outstanding contributions to the devel-

opment of the Company and conveyed the Company’s care

and respect.Protection of Women's Rights and Interests

The Company places great emphasis on the protection of women’s rights and actively builds and improves a comprehensive system

for safeguarding women’s rights. In terms of system construction the Company has formulated the Notice on Maternity Leave and

Benefits for Female Employees and the Notice on Proper Internal Retirement Work for Female Employees. Additionally to safeguard

women’s rights the Company has implemented various welfare policies organized diverse activities for female employees and is

committed to ensuring that every female employee deeply feels cared for and respected achieving a beautiful blend of personal

value and company development.

125 1262024 Environmental Social and Governance (ESG) Report

Key Performance Training and Development

Proportion of Female Employees in Management: 10%

Employees on Maternity Leave: 156 Return Rate: 100%

To further standardize the Company’s employee training management and enhance employee quality and capabilitythe Company adheres to the training principles of “full participation classification and grading evaluation and assess-ment with promotion and training linked” in accordance with relevant laws regulations and the Human Resources

Management System in order to create a scientific systematic and efficient training system that supports the personal

career growth of employees.Assistance for Employees in Difficulty

To ensure the effective execution of the annual visit and care for employees in difficulty the trade union has developed a detailed

plan for visiting employees’ homes and delivering warmth. It has established a long-term mechanism for caring and helping employ-

ees in difficulty further deepening and solidifying the “delivery of warmth” program to ensure no employee is left behind.Employee Training

Assistance for Employees in Difficulty Case Study

To further standardize employee training management and in line with relevant laws regulations policy documents and the Human

On December 23 2024 the group party committee held a special meeting to hear the report from the group union regard- Resources Management System Xingfa Group has formulated the Management Measures for Employee Training based on the actual

ing assistance for employees in difficulty. The committee decided to allocate special funds to help employees who are training management practices of the Company. A training management system has been established consisting of company-level

facing difficulties due to illness or natural disasters. The union organizations at all levels were required to further strengthen and unit-level training. The human resources department serves as the core management entity for employee training overseeing all

their responsibilities enhance humanistic care for employees and ensure that the warmth of the party committee and the training activities. The training center is responsible for organizing and implementing company-level training while the employing

concern of the union reach the hearts of the employees allowing them to work with peace of mind live happily and enjoy units are the responsible parties for training their respective employees.a joyful and peaceful holiday season. The Company designs training course evaluation indicators according to the principles of “objective fair and operational” and

develops improvement plans based on evaluation results. The Company-level training program clearly defines assessment standards

and strictly enforces them; unit-level employee training is conducted according to the training management requirements of each

employing unit.Assistance Expenditures in 2024

The Company contributed RMB 1.195 million to provide assistance to 241 employees facing difficulties.The Company secured RMB 191000 to assist 11 registered poverty-stricken households and RMB 235000 to

Main Responsibilities of the Human Resources Department

carry out warmth-giving activities for 109 employees.Responsible for organizing the formulation and improvement of employee training management-related

The Company secured RMB 76000 to provide educational assistance to the children of 34 employees. rules and regulations.Responsible for organizing the preparation of the Company’s annual training plan and budget.The Company contributed RMB 11.9553 million to distribute rice oil oranges tea and other welfare benefits to all

members. Responsible for guiding supervising inspecting and evaluating all levels of training.The Company organized 84 person-times of model workers to travel to Qingdao and Shennongjia for therapeutic

rest and relaxation.

127 1282024 Environmental Social and Governance (ESG) Report

Main Responsibilities of the Training Center Onboarding Training on College Graduate from Campus Recruitment Case Study

On July 9 2024 Xingfa Group held the 2024 Opening Ceremony of the Onboarding Training for New Hires from Campus

Undertake the construction and management of company-level training projects and course systems. Recruitment in Xingshan. The training invited company executives and university lecturers to teach personally. Customized

training courses such as the Growth and Development of Xingfa and the Self-Cultivation and Role Transformation at Work-

place were provided to lead the trainees into Xingfa understand the Company culture grasp the corporate spirit and

Take charge of the construction and management of the Company’s trainer team. enhance personal qualities.Organize the formulation of specific implementation plans for company-level training projects.Coordinate with employing units to organize implementation and evaluate training situations.Collect and archive company-level employee training records.Collect organize and submit employee training information and provide guidance and supervision for unit-level

training.Provide management and service related to vocational skills certification.Coordinate the acquisition of government subsidies and honors related to company training.Key Performance

Coordinate the construction and management of the Company’s training information system.Investment in Employee Training: RMB 21024700 Total Training Sessions: 100 Sessions

Total Number of Trainees: 11350 Persons Total Training Duration: 608246.5 Hours

Main Responsibilities of the Employing Unit Average Annual Training Duration Per Employee: 53.59 Hours Coverage Rate of Employee Training: 100%

Organize the preparation of annual training plans and budgets for the employees under their jurisdiction.Designate a person to cooperate with the implementation of company-level training tasks build teaching material

libraries and develop the trainer team.Training Platform and Instructor Team

Manage the training course system and instructor team at the unit level implementing training according to the

To standardize the management of the Company’s trainer team and build a high-quality trainer team the Company adheres to the

plan and archiving employee training records.principle of “balancing internal and external efforts” and has formulated the Measures for Trainer Management. The Training Center

is responsible for the construction and daily management of the trainer team including the selection evaluation and other aspects;

aiming to build a high-quality professional trainer team to provide solid support for the Company’s training work.Company-level employee training focuses on the construction of five categories of general training projects: “safety specialization The Company established Xingfa Vocational School and has initially developed a structured curriculum system advancing coursechemical skills intelligent specialization business specialization and management capability.” It establishes responsibility systems for development through both management rotation training and skills-based practical training. This system covers three levels - grass-

training projects and course leaders and implements corresponding advanced intermediate and beginner training course systems. roots middle and senior - to meet the learning needs of employees at different stages. It aims to enhance both managerial compe-

tence and professional skills. Skill training is organized by job type through dedicated professional platforms with a platform director

responsibility system in place. Each platform director is responsible for the overall planning construction and operational manage-

ment of their respective training platform.

129 1302024 Environmental Social and Governance (ESG) Report

Training for Primary Management Case Study Signing of University-Enterprise Cooperation Agreement Case Study

The Company offers the 6-day training in a full-time format. Employees from different units must complete at least one On November 22 2024 the signing ceremony for the university-enterprise cooperation between Xingfa Group Hubei Land

week of online video learning before the course and pass a pre-course exam. During the course the Company will use a Resources Vocational College and Xingshan County Vocational Education Center was grandly held at Hubei Land Resourc-

combination of various teaching methods for concentrated instruction. After the course specialized problem-solving and es Vocational College. According to the agreement the three parties will carry out a “3+2” segmented training program (3

post-course tutoring will be provided to ensure that the training content is effectively implemented. years of study at Xingshan County Vocational Education Center followed by 2 years of study in a Special Class of Xingfa

Group at Hubei Land Resources Vocational College after graduation from the secondary vocational school). The three

parties will deepen cooperation in employee training the construction of high-quality industry-academia-research

platforms and graduate employment cooperation.Employee Promotion

Training on Information Technology

The Company places great importance on talent development and utilization. On the one hand it establishes four major career devel-

opment paths in management including technology marketing and skills; providing growth paths and platforms for different types

The Company’s employee training adopts a combination of online and offline methods. The Training Center based on Xingfa Group’s

of talent to showcase their abilities. On the other hand in terms of talent utilization the Company focuses on selecting outstanding

Online Training Academy and SAP system gradually builds a sound information-based training platform to accelerate the informati-

talents from recruited university graduates and through layers of recommendation and assessment internal open recruitment and

zation of the entire training management process. Employees can view training courses participate in online learning complete

public recruitment selects excellent middle and grassroots-level management and technical personnel thereby stimulating team

assignments and exams through the platform and get certificates after completing the required course hours and passing the exams.vitality.Internal Transfers

University-Enterprise Cooperation Xingfa Group has formulated the Employee Position Change and Work Handover Management Guidelines in accordance with the Company Law of the People’s Republic of China the Labor Law of the People’s Republic of China and other relevant national laws and

regulations as well as the Articles of Association and the Human Resources Management System. These guidelines aim to standardize

The Company actively engages in university-enterprise cooperation establishing close connections with 2 undergraduate universi- the work handover process during employee position changes. The human resources department responsible for managing both

ties 5 vocational colleges and 5 secondary vocational schools with a total of 2857 individuals trained. position changes and work handover oversees the entire process whenever an employee changes roles.Key Performance

Number of Employees from Successful Internal Transfers or Internal Job Application:1021Persons

Percentage of Employees from Successful Internal Transfers or Internal Job Application:7.23%

131 1322024 Environmental Social and Governance (ESG) Report

Occupational Health and Safety

During the Reporting Period the Company passed the certification of the ISO

45001 Occupational Health and Safety Management System.

Xingfa Group has established a comprehensive safety system and framework by strictly adhering to the Work Safety

Law of the People’s Republic of China and the Occupational Disease Prevention and Control Law of the People’s Republic

of China as well as other relevant laws and regulations. Through emergency drills and hazard inspections the Compa-

ny ensures operational safety and employee well-being thereby building a strong safety foundation for talent devel-

opment and the stable operation of the business. During the Reporting Period no major safety accidents have

occurred in the Company. Occupational Health and

Safety Management System Certification

Safety Production Responsibility Assessment

Governance To fulfill the primary responsibility for safety environmental protection and internal security and strengthen management each subsidiary has prepared the 2024 Safety Environmental Protection and Internal Security Target Management Responsibility State-

ment in line with national laws government directives and company policies. Xingfa Group has established a safety responsibility

Xingfa Group has developed the Safety Management System and other relevant regulations based on national laws and regulations system for all employees featuring clear accountability assessments well-defined evaluation criteria publicly displayed results and

such as the Work Safety Law of the People’s Republic of China the Mining Safety Law of the People’s Republic of China the Occupa- corresponding rewards and penalties.tional Disease Prevention and Control Law of the People's Republic of China and the Regulations on the Reporting and Investigation of

Production Safety Accidents as well as the Basic Norms for Internal Control and the Articles of Association. The Safety Production Key Performance

Committee is responsible for overseeing safety management and strengthening processes to effectively prevent and minimize

accidents. To further enhance safety management we sign safety responsibility agreements with employees ensuring that safety

measures are fully implemented at every stage of the process. Safety production responsibility agreement signing rate100%

Responsible for the formulation of the Company’s safety production regulations management

standards and safety production policies.Responsible for regularly holding safety production meetings analyzing the Company’s safety produc- Safety Management Trainings

tion situation and addressing major safety production issues.Responsible for overseeing the enforcement of safety production laws regulations and rules across Xingfa Group has developed the 2024 Training Plan and has actively conducted comprehensive multi-level safety training activities.units and ensuring that management at all levels fulfills their safety production responsibilities. The training program covers a wide range of topics including safety and environmental laws and regulations safety leadership

instrumentation safety and other specialized areas. The goal is to strengthen employees' understanding of key safety aspects in the

Responsible for organizing safety awareness and education activities as well as the training and assess- production process and enhance both their safety awareness and professional skills.ment of the Company’s safety management personnel.Responsible for supervising and inspecting each unit’s monitoring of major hazard sources and the

rectification of significant accident hazards. The First Lesson about Work Safety in 2024 Case Study

Responsible for conducting annual safety goal assessments for each unit and holding individuals

accountable for accidents resulting from failure to meet safety production standards. On February 21 2024 Xingfa Group invited leaders from the

relevant authorities to give the First Lesson about Work

Responsible for organizing and coordinating the investigation and handling of safety production Safety in 2024 to safety managers of the Company through

accidents within the Company’s scope of management. video conference. The training aimed to reinforce the impor-

tance of prioritizing safety in production and strengthen the

Responsible for regularly organizing specialized teams to conduct targeted inspections of safety core responsibility for safety management.management performance at each unit and level identify issues and ensure timely rectification.Responsibility of Safety Production Committee

133 1342024 Environmental Social and Governance (ESG) Report

Enhancing Employee Health Literacy Through Comprehensive

Occupational Disease Prevention Campaigns Case Study Opportu- Duration Potential

nity Description of Opportunity of

Impact on

Financial Countermeasures

Impact Value ChainType Impact

To promote the Occupational Disease Prevention and Control Law of the People’s Republic of China the Safety and Environ-

mental Protection Department of Hubei Xingrui a subsidiary of Xingfa Group displayed banners and posters at the

Intelligent technologies can be used

workplace. During Occupational Health Awareness Week SMS messages on occupational health were sent to employees Increase investment in research for remote equipment monitoring and and development collaborate with

every day. In addition regular training sessions were conducted covering topics such as the Occupational Disease Preven- automated operations reducing research institutions introduce and

tion and Control Law of the People’s Republic of China dust hazard prevention and occupational health literacy. These Technological on-site operational risks for employ- Medium Opportunities term Operations

Reduction in

ees. Green chemistry technologies can operating costs

independently develop intelligent

initiatives aimed to strengthen employees’ awareness of occupational disease prevention promote knowledge of preven- and green chemistry technologies; minimize the use of harmful chemicals conduct training for employees on

tive measures and enhance their emergency response capabilities. improving the work environment from these technologies.the source.The government is tightening its Respond actively to policies and

Policy supervision of occupational health and Long Operations Reduction in take proactive actions to improve Opportunities safety in enterprises urging them to term operating costs the occupational health and safety

upgrade their standards. management level.Talent A favorable occupational health and Consistently improve the occupa-

development Longsafety environment helps attract top term Operations

Increase in tional health and safety environ-

opportunity operating incometalent. ment while enhancing publicity and promotion.Strengthen the publicity of occupa-

Opportunity Outstanding performance in occupa- Long Upstream and Increase in tional health and safety achieve-

Key Performance for improving tional health and safety enhances the term downstream operating income ments to establish a positive social image Company’s social image. corporate image.Safety Education Budget: RMB 13239400 Participants in Training on Safety: 200122 Person-times

Coverage Rate of Training on Security Education: 100% Coverage Rate of Training on Safety Risk Prevention: 100%

Impact Risk and Opportunity Management

Strategy To ensure the implementation of management measures and strengthen risk management the Company follows the Notice on

Strengthening the Company’s Risk Grading and Control Measures formulated by Yichang Xingfa Group reinforcing primary responsi-

Duration Impact on Potential bility and the frequency of tiered inspections.Risk Description of Risk Countermeasures

Type of Value Financial Impact Chain Impact

Identification of hidden hazards

Employees who are exposed to Enhance the provision and manage-

chemical materials for extended ment of personal protective

periods may develop occupational equipment; regularly organize Health risk Medium term Operations Increase in We place high importance on safety production and take active steps in hazard inspections. All subsidiaries strictly adhere to the

diseases such as respiratory operating costs occupational health check-ups for

employees; and optimize production requirements of the relevant authorities and the Company’s Three-Year Action Plan for Root Cause Elimination (2024-2026) actively illnesses poisoning and other

health issues. processes to reduce exposure to engaging in safety hazard inspections. During the Reporting Period the main leaders of each subsidiary led specialized groups to

harmful substances. conduct self-inspections and corrections in accordance with the 20 Criteria for Identifying Major Safety Hazards in Hazardous Chemi-

The operation of chemical produc- Refine safety operating procedures cal Production and Operations there are no significant safety hazards identified.tion equipment is complex and may Increase in and strengthen safety training for Safety risk result in accidents such as Short term Operations operating costs employees; regularly maintain and

mechanical injuries electric shocks service equipment; also install

and other hazards. safety protective devices.Key Performance

Establish and improve the occupa-

tional health and safety manage-

The occupational health and safety

Management Increase in ment system; and strengthen management system is incomplete

Risks Long term Operations internal supervision and assessment with ineffective implementation. operating costs Rectification Rate for Identified Hazards Within the Designated Timeframe:100%to ensure effective implementation

of the system.

135 1362024 Environmental Social and Governance (ESG) Report

Contingency Plans and Drills Emergency Response Process for Production Safety Accidents

To effectively implement the Emergency Response Law of the People’s Republic of China and the Production Safety Law of the People’s

Republic of China and to ensure efficient rescue operations in the event of a production safety accident protecting both employee

safety and company property each production unit has developed an Emergency Response Plan for Production Safety Accidents to Event Occurrence

guide emergency rescue actions and regular training and drills.To improve emergency response capabilities Xingfa Group regularly holds safety drills safeguarding the stable operation of core

business activities and reducing potential risks and losses.Receipt of Alarm

Y

Alarming Feedback

Reinforcing the Safety Defense Line with the Firefighting Team Framework Case Study N

Judgment of Response Level

Emergency Personnel Deployment

Each unit has formed a part-time firefighting team comprising employees while full-time firefighting teams have been Y

established in the Yichang Yidu and Inner Mongolia campuses. These teams carry out daily patrols and regularly conduct

joint emergency drills with production units. They not only ensure internal emergency response but also collaborate with Information Network Activation

neighboring businesses and communities to handle emergencies boosting the Company’s social presence. Emergency Activation

Emergency Rescue

Emergency Resource Allocation

Communication and Coordination

On-site Command Deployment

Expanded Emergency Response Response Action Medical Rescue

Alert Evacuation

N

Request for Reinforcements Situation Control

Fire Fighting

Post-Disaster Assessment

Y

Key Performance

De-alerting

Emergency Relief

Number of Safety Emergency Drills:1699 Investment in Safety Production: RMB209204800

32563 Afterward HandlingNumber of Participants or Observers in the Drills: Person-times

Emergency Reconstruction

Accident Investigation

Summary and Analysis

Response to Emergencies

Metrics and Targets

Safety production has always been a top priority in our production operations. In the event of a production safety accident personnel

at all levels respond quickly and all departments and teams collaborate closely to efficiently implement a series of emergency

measures prioritizing employee safety and minimizing accident-related losses. Xingfa Group has developed a set of comprehensive and forward-thinking occupational health and safety goals aligning with indus-

try characteristics and regulatory requirements to establish a solid foundation for a safe and healthy work environment.

137 1382024 Environmental Social and Governance (ESG) Report

Occupational Health and Safety HSE Safety Management Information Platform

HSE is an information platform centered around the Hubei Province “12345” safety management model. It covers safety management

Accident control goal Public security management goals elements such as organizational structure and responsibilities hazard (safety risk) management laws and regulations and corporate

policies hazardous operation management emergency management accident handling individual records education and training

Zero accidents of category 6 and above. 100% legal education rate no criminal or public security with certification and more. Additionally the platform provides management functions such as statistical reports and a mobile app

cases (including loss of hazardous chemicals and explosives). aligning with the safety production management characteristics of Xingfa Group.Site management goals Institutionalized Management

100% 100% Basic management goals Xingfa Group has identified the laws safety management practices and operating procedures required for compliance forming a safety ticket usage rate employ-

comprehensive regulatory framework.ee qualification rate for their positions 100% Well-organized and complete basic records effective

100% Dual Safety Preventionhazard rectification rate and protective provision of protective equipment and emergency tools

100% Our dual safety prevention efforts cover registration of major hazard sources the announcement of the responsibility system equipment usage rate. compliance rate 100% operational rate for safety and environmental protec- safety classification and control and inspection of potential hazards. The integration of hazard inspections with the EAM

for tail gas and wastewater emissions and tion systems 100% pass rate for three-level safety educa- system has been implemented in selected workshops at Trisun Chemical and Hubei Xingrui.

100% rate for comprehensive utilization and tion 100% qualification rate for three types of personnel

safe disposal of various solid waste and hazard- Safety Production Responsibilitiesand synchronization of safety environmental protection fire

ous waste. Rigorous investigation and handling Xingfa Group conducts safety performance evaluations for both units and individuals leveraging online statistics to track the safety and occupational health procedures with production

zero effectiveness of safety management implementation.of the “three violations” with major facilities for newly constructed renovated and expanded

hazards identified in external inspections. Education and Trainingprojects.It includes five submodules: training needs assessment training planning training record management position safety aware-

ness cards and contractor management.On-site Management

Occupational Health Management Measures It includes five submodules: position risk forecasting management of non-routine tasks handling of special operations

equipment health record maintenance and change management.To effectively implement the decisions and plans for occupational disease prevention Xingfa Group has taken proactive actions with

a multi-faceted approach including the provision of comprehensive occupational disease protection facilities and the placement of General Management

prominent warning signs in the workplace to ensure employee safety during operations. Moreover the Company has established a It includes seven submodules: personnel qualification management process safety management hazardous chemicals

personal occupational health file for each employee to track their health status in real-time providing all-around protection for their management emergency and incident management safety production cost management safety news and announcements.occupational health.Occupational Health

Occupational Hazard Detection and Health Check-up

It includes four submodules: occupational hazard management occupational health monitoring records protective equipment

Xingfa Group always prioritizes employees’ occupational health and strictly follows the requirements of the Occupational Disease management and occupational hazard detection and evaluation.Prevention and Control Law of the People's Republic of China. We have formulated the Management Measures for Occupational Environmental management

Disease Diagnosis Identification and Benefits Implementation to safeguard employees’ rights and interests at the institutional level.The Company arranges regular occupational health monitoring and thorough physical check-ups to identify occupational injuries as It includes six submodules: environmental planning management environmental regulation management environmental

early as possible. Additionally regular detection of hazard factors in the workplace is conducted to ensure all-around protection of factors management environmental facility management pollutant emission management and hazardous waste manage-

employees’ health. During the Reporting Period the Company engaged a third-party testing agency to assess occupational hazards ment with all core environmental management tasks being managed online.and issue a report on the detection of these hazards.One File for One Employee

During the Reporting Period the Company arranged occupational health check-ups for employees. One file is created for each employee containing

employee basic information health archives training

and educational records as well as operational task logs.Key Performance

Coverage Rate for Employee Health Checkups: 100% Occupational Hazard Detection Rate: 100%

Pass Rate for Occupational Hazard Monitoring: 100% Number of New Occupational Diseases: 0

139 1402024 Environmental Social and Governance (ESG) Report

Contractor Management Rural Revitalization

Xingfa Group has formulated the Contractor Management System to strengthen the management of contractors provide safety

training improve safety awareness and service quality protect employees’ lives and property and prevent accidents and incidents at

the source.With a strong commitment to social responsibility Xingfa Group continues to focus on contributing to rural revitaliza-

tion. Focusing on key poverty-stricken areas such as Shukongping and Maocaoping villages in Xingshan County

Xingfa Group strategically invests in industry support infrastructure development and talent cultivation making

significant contributions to the economic growth and improvement of livelihoods in these villages thereby solidifying

the achievements of poverty alleviation.Active Response to National Initiatives

Maocaoping Village

Xingfa Group actively participates in the Belt and Road Initiative by promoting our chemical industry technologies and

expertise in the countries/regions along the Belt and Road.Xingfa Group built a new water Xingfa Group assisted in the sale of pork

Livelihood supply station for Maocaoping Industry vegetables and other agricultural products

Support Support

Village. with a total value of RMB 750000 .Xingfa Group’s Journey in the Belt and Road Initiative Case Study

In 2023 the Company expanded internationally by acquiring the Indonesian company PT. Adil Makmur Fajar (AMCO) which

Xingfa Group incorporated four Xingfa Group provided over 20 job oppor-is our first overseas production base. In 2024 to establish AMOC as a leader in Indonesia’s agricultural chemical sector

Xingfa Group deployed a team of management and technical experts to AMOC. We provided comprehensive support households affected by illness or tunities with more than 100 local villagers

across multiple areas including governance structure financial systems technology and production processes. This effort accidents leading to poverty or a employed at places like the mines and

Medical

aimed to unlock AMOC’s potential and actively contribute to providing more green crop protection services for the agricul- return to poverty into the monitoring Employment canteens of Xingfa Group. The average Support

program with support measures Supportture industry in Indonesia and Southeast Asia supporting sustainable economic growth and benefiting local farmers. annual income per person is approximately

including social aid and medical RMB 50000 significantly expanding

Following the acquisition of AMOC in Indonesia the Company successfully acquired Banagro in Ghana in 2024. This acquisi- insurance provided. employment prospects for the villagers.tion also marked the first platform for Xingfa Group in Africa. To enhance employee competitiveness we organized a

6-month training program at the headquarters for foreign employees and provided financial support of USD 10000 to help

employees struggling with health issues.Xingfa Group collaborated with the village committees to achieve the “Harmonious and Beautiful Village”

goal. The Company organizes a “Clean Village Day” every Friday encouraging villagers to participate in

waste sorting which helps enhance the overall environment of the village. Additionally we continue our

efforts in building a “Safe Village”.Ecological

Conservation The village work team requested materials including steel and cement worth approximately RMB 150000

from Xingfa Group while the Houping Phosphate Mine provided RMB 3 million for the overall environmental

renovation of the Lugou area.

141 1422024 Environmental Social and Governance (ESG) Report

Shukongping Village Key Performance

Investment in Rural Revitalization: RMB 60.2 million

Number of People Benefited from the Rural Revitalization Initiative: Over 40000 Persons

Livelihood

Support Xingfa Group donated RMB 1238800 to Gufu Town for the construction of the Xianshui River and the Mantianxing

Infrastructure Project.Xingfa Group allocated RMB 250000 for the water quality improvement and ecological restoration project at

As part of the “Warm Winter Campaign” 412 sets of Spring Festival relief supplies were distributed to those in need.Gudongkou Reservoir.Xingfa Group completed the construction of squares for Jiangjiawan and Dingjiahe villages as well as the parking lot

in Luziping Village and the village committee building.In 2024 Xingfa Group supported a total of 11 individuals through the Spring Rain Dew Program with a total funding

of RMB 16500 .In 2024 Xingfa Group provided temporary aids to a total of 6 individuals through the special hardship relief program Social Welfare

with a total funding of RMB 16800 .Home visits were made to elderly people living alone senior citizens and children in need as part of the “Knock onDoors” initiative.Xingfa Group upgraded the drinking water systems for 41 households in the village to ensure safe and high-quality Xingfa Group also actively supports various charitable initiatives focuses on addressing the real needs of women and

water supply. children and works closely with many nonprofit organizations. Through concrete actions we deeply integrate into

social welfare activities and consistently contribute to the advancement of public welfare.Xingfa Group purchased social security insurance for poverty-stricken households low-income families and house-

holds receiving basic living allowances.Xingfa Group invested more than RMB 200000 in the maintenance of the Dachong-Tongzu road and allocated

over RMB 400000 for the improvement of Yujiayuanzi’s farmland drainage system. Additionally Shukongping

Phosphate Mine provided approximately RMB 20000 worth of materials including I-beams and iron plates.Key Performance

Xingfa Group actively sought funds from higher-level authorities to construct a 1538 -meter-long road connecting

village industries to households which has now been completed and is in use.External Donation: RMB107310200

Industry Employment Ecological

Support Support Conservation

Xingfa Group leased 15 mu of Xingfa Group prioritized local In 2024 the Company organized 12

land to support the growth of villagers for employment at environmental governance and Village

the village collective economy Shukongping Phosphate Mine. Cleanliness Day activities along with 4

where sweet corn was planted. events for rewarding participation in the

rural civility points system. Additionally

12 campaigns were conducted to promote

environmental and cultural reform

policies and 46 posts were shared in the

village WeChat group to publicize these

policies.

143 144Appendix

ESG Performance Overview

Indicator Name Unit 2024 Indicator Name Unit 2024

Governance Dimension Performance Governance Dimension Performance

Economic Performance Meetings of the Supervisory Board Convened Times 8

Total Assets RMB billion 47.776 Proposals Reviewed and Approved at the Meetings of the Supervisory Board Items 26

Operating Income RMB billion 28.396 Average Attendance Rate of Members of the Supervisory Board % 100

Net Profits RMB billion 1.619 Compliant operations

Net Profit Attributable to Shareholders of the Parent Company RMB billion 1.601 Training on Laws and Regulations (Session) Times 22

Governance through the General Meeting of Shareholders Board of Directors and Supervisory Board Duration of Training on Laws and Regulations Hours 64

General Meetings of Shareholders Convened Sessions 4 Number of Participants in Training on Laws and Regulations Person-times 2265

Proposals Reviewed and Approved at the General Meeting of Shareholders Items 18 Number of Legal Personnel Participating in Training Persons 19

Meetings of the Board of Directors Convened Sessions 9 Information Disclosure

Proposals Reviewed and Approved at the Meetings of the Board of Directors Items 56 Regular Reports for Public Disclosure Copies 4

Average Attendance Rate of Members of Board Members % 100 Provisional Reports for Public Disclosure Copies 81

Number of Members of the Board of Directors Persons 13 Penalties for Violations in Information Disclosure Times 0

Male Persons 12 Protection of shareholders’ rights and interests

By Gender

Female Persons 1 Number of On-Site Investor Surveys Received Times 18

Independent Directors Persons 7 Participants in On-Site Investor Surveys Received Person-times 100

By Position

Non-Independent Directors Persons 6 Total Performance Briefings Convened Times 4

40 (inclusive) to 50 (exclusive) years old Persons 2 Number of Investor Questions Answered Pieces 114

By Age 50 (inclusive) to 60 (exclusive) years old Persons 6 Risk Control

60 years old or above Persons 5 Financial Audit Report Copies 44

Han Nationality Persons 10 Project Settlement Audit Report Copies 523

By Ethnicity Miao Nationality Persons 2 Anti-Commercial Bribery and Anti-Corruption

Tujia Nationality Persons 1 Signing Rate of Integrity Agreement % 100

145 146Indicator Name Unit 2024 Indicator Name Unit 2024

Environmental Dimension Environmental Dimension

Response to Climate Change Energy Utilization

Total GHG Emissions t CO2e 6432033 Total Direct Energy Consumption 10000 tce 129.93

Including: Scope 1 GHG Emissions t CO2e 3863177 Coal 10000 tce 123.24

Scope 2 GHG Emissions t CO2e 2568856 Diesel 10000 tce 0.33

GHG Emission Intensity t CO2e/Ton of Product 0.339 Electrode 10000 tce 0.70

Environmental Compliance Management Natural gas 10000 m3 4256.89

Total Investment in Environmental Protection RMB 10000 37601.17 Total Indirect Energy Consumption 10000 tce 73.71

Training on Environmental Protection Times 58 Green Electricity Consumption 100 million kWh 10.02

Number of Participants in Training on Environmental Protection Person-times 1539 Total Energy Consumption 10000 tce 203.64

Duration of Training on Environmental Protection Hours 1965 Energy Consumption Intensity tce/10000 yuan of revenue 0.72

Pollutant Emissions

Wastewater Discharges 10000 tons 1042.25

Indicator Name Unit 2024

Wastewater Discharge Intensity Tons / 10000 yuan of revenue 3.67

Industry Value Dimension

Chemical Oxygen Demand (COD) Emissions Tons 433.79

Innovation-driven Development

Ammonia Nitrogen (NH3-N) Emissions Tons 24.72

Total Number of R&D Team Members Persons 1613

Sulfur Dioxide (SO2) Emissions Tons 1271.14

Proportion of R&D Personnel to Total Employees % 11.42

Nitrogen Oxides (NOx) Emissions Tons 1019.32

Number of Full-Time R&D Personnel Persons 500

Waste Disposal

Technological Innovation Projects Units 86

Volume of Non-Hazardous Waste Generated 10000 tons 534.88

Total Number of Authorized Patents Items 1421

Volume of Non-Hazardous Waste Disposed Of 10000 tons 534.88

Total Number of Authorized Invention Patents Items 483

Generation Intensity of Non-Hazardous Waste Tons / 10000 yuan of revenue 1.88

Total Authorized Utility Model Patents Items 938

Volume of Hazardous Waste Generated 10000 tons 5.15

R&D Investment RMB billion 1.188

Volume of Hazardous Waste Disposal 10000 tons 5.15

Percentage of R&D Investment in Main Business Revenue % 4.18

Generation Intensity of Hazardous Waste Tons / 10000 yuan of revenue 0.02

Total Waste Produced 10000 tons 540.03

Waste Production Intensity Tons / 10000 yuan of revenue 1.90

147 148Indicator Name Unit 2024 Indicator Name Unit 2024

Industry Value Dimension Human Resources and Social Dimension

Innovation-driven Development Health and Safety

Number of New Product Development Projects Units 68 Signing Rate of Production Safety Accountability Statement % 100

Number of New Technology Development Units 37 Safety Education Budget RMB 10000 1323.94

Number of Science and Technology Awards Received from China Number of Participants in Safety Training

Petroleum and Chemical Industry Federation and Provincial Authorities Items 3 Person-times 200122

Number of Major Innovation Achievements Items 3 Coverage Rate of Training on Security Education % 100

Total Number of Software Copyrights Items 26 Coverage Rate of Training on Safety Risk Prevention % 100

Rectification Rate for Identified Hazards within the Designated

Total Number of Trademarks Items 179 Timeframe % 100

Specialized and Sophisticated Enterprise that Produces Novel and

Units 6 Number of Security Emergency DrillsUnique Products Sessions 1699

National High-tech Enterprise Units 16 Investment in Safety Production RMB 10000 20920.48

National Enterprise Technology Center Units 1 Number of Participants or Observers of Drills Person-times 32563

Postdoctoral Workstations Units 1 Coverage Rate of Health Checkups Among Employees % 100

Safety and Quality of Products and Services Detection Rate of Occupational Hazard Factors % 100

Number of Sampling Inspections by Third-Party Organizations Times 239 Qualification Rate in Detection of Occupational Hazard Factors % 100

Training on Quality Times 9 Number of New Occupational Diseases Cases 0

Total Duration of Training on Quality Days 28 Labor Relations Management

Number of Participants in Training on Quality Person-times 451 Number of Employees Persons 14121

Data Security and Customer Privacy Protection Male Persons 10230

By Gender

Number of Participants in Training on Data Security and Customer

Privacy Protection Person-times 12756 Female Persons 3891

Coverage Rate of Training on Data Security and Customer Privacy Directors Supervisors and Officers

Protection % 85 (Excluding Independent Directors) Persons 19

Average Duration of Training on Data Security and Customer Privacy By Job Level

Protection Hours 1 Middle Management Personnel Persons 996

Number of Information Security and Customer Privacy Protection

Violations During the Reporting Period Times 0.00 Grassroots employees Persons 13106

Supply Chain Security* Manufacturing Persons 11162

Total Number of Suppliers Units 269 Sales Persons 710

Suppliers with Quality Management System Certification Units 64 By Specialty Technology Persons 1782

Suppliers with Occupational Health And Safety Management System

Certification Units 43 Finance Persons 83

Signing Rate of Supplier Link Agreement % 100 Administration Persons 384

Number of Incidents with Major Risk and Impact in the Supply Chain Cases 0

Note: The statistical scope of supply chain security only covers the headquarters of the Company Yichang Park and Yidu Park

149 150Indicator Name Unit 2024 Indicator Name Unit 2024

Human Resources and Social Dimension Human Resources and Social Dimension

Under 30 (exclusive) years old Persons 3137 Under 30 (exclusive) years old Persons 683

30 (inclusive) to 40 (exclusive) years old Persons 407

30 (inclusive) to 40 (exclusive) years old Persons 5499 By Age

By Age

40 (inclusive) to 50 (exclusive) years old Persons 130

40 (inclusive) to 50 (exclusive) years old Persons 3771

50 years old or above Persons 23

50 years old or above Persons 1714

Male Persons 994

College Degree and Below Persons 9888 By Gender

Female Persons 249

Bachelor’s Degree Persons 3576

By Educational Employee Turnover Rate % 8.80

Background

Master’s Degree Persons 606

Under 30 (exclusive) years old % 56.83

Doctoral Degree Persons 51 30 (inclusive) to 40 (exclusive) years old % 21.93

By Age

Chinese Mainland Persons 13927 40 (inclusive) to 50 (exclusive) years old % 16.58

By Region Hong Kong Macau and Taiwan Persons 9 50 years old or above % 4.66

Overseas Regions Persons 185 Male % 82.79

By Gender

Female % 17.21

Number of New Employees Persons 2442

Proportion of Female Employees in Management % 10

Male Persons 487

By Gender Number of Employees on Maternity Leave Persons 156

Female Persons 1955

Return Rate of Employees on Maternity Leave % 100

Social Recruitment Persons 1854

By Recruitment Development and Training

Channel

Campus Recruitment Persons 588

Investment in Employee Training RMB 10000 2102.47

Employment Contract Signing Rate % 100 Total Number of Training Sessions Sessions 100

Number of Employees with Disabilities Persons 40 Total Number of Trainees Persons 11350

Number of Employees of Minority Nationalities Persons 778 Total Training Duration Hours 608245.5

Number of Ethnic Minority Employees in Management Persons 74 Average Training Duration per Employee per Year Hours 53.59

Social Insurance Coverage Rate Coverage of Employee Training 100 % 100 %

Number of Employees from Successful Internal Transfers or Internal

Proportion of Employees Regularly Assessed for Performance and Job Application Persons 1021

Career Development % 100

Percentage of Employees from Successful Internal Transfers or

Internal Job Application % 7.23

Number of Projects Approved by the Employee Congress Items 3

Rural Revitalization

Number of Projects Approved by the Trade Union Items 6

Rural Revitalization Investment Amount RMB 10000 6020

Proportion of Trade Labor Members in Existing Employees % 100

Contribution to Society

Number of Employees Resigned Persons 1243

External Donations RMB 10000 10731.02

151 152Indexes

Sustainability Reporting Standards of the State-owned Assets Supervision and Administration Commission

Chapters and Sections Global Reporting Initiative Study on the Preparation of ESG Special Reports of Listed Guide to Corporate Sustainability Reporting in China Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulation

(GRI Standards)(GRI Standards) Companies Controlled by Central State-owned Enterprises (CASS-ESG6.0) of Listed Companies—Sustainability Report (Trial)

About This Report 2-1/2-2/2-3 / P1.1/P1.2 Articles 4/6

Message from Management 2-22 / P2.1 /

About Xingfa Group 2-1/2-6/2-8/2-9/2-28/201-1 / P3.1/P3.2/P3.3 /

Sustainable Develop-

ment Governance 2-14/2-16/2-29/3-1/3-2/3-3 G1.1.1 G1.1.1/G1.1.2/G1.1.5/G1.1.6/G1.1.8/G1.1.9/G1.1.11/G1.3 Articles 5/9/11/12/18/19/53

Party Building / /

Leadership G1.1.4 /

Governance through the

Standardized General Meeting of 2-9/2-10/2-11/2-12/2-13/2-18/2-19/ G1.1.1/G1.1.2/G1.2/G1.3/G3.2

Governance: Shareholders Board of 2-20/405-1 / /Directors and Supervisory

Strengthening Board

the Foundation Compliance Manage-

ment 2-27/207-1/207-2/207-3 G2.1/G5.1/G5.2for Develop- /

/

ment Protection of sharehold-

ers’ rights and interests 2-16/2-29/201-1 G3.1/G4.1/G4.2 / /

Business Ethics 2-23/2-27/205-2/206-1 G2.2/G2.3 G2.1.1/G2.1.2/G2.1.3/G2.2.1/G2.2.2 Article 55/56

Opportunities in Clean

Technology / E5.4.2 E3.3.1/E3.3.2/E3.3.4 Article 37

Circular Response to Climate E3.1.1/E3.1.2/E3.1.3/E3.1.4/E3.1.6/E3.2/E3.3.1/E3.4.1/E5 E1.1.1/E1.1.2/E1.1.3/E1.1.4/E1.1.5/E1.1.6/E1.1.7/E1.1.8/E1.1.11/E

Economy: Change 302-4/305-1/305-2/305-4/305-5 .1.1/E5.3.1/E5.4.1/E5.5.2/E5.5.3 1.1.12/E1.1.13/E1.1.14/E1.1.15/E1.1.16/E1.1.19

Article 21/22/23/24/25/26/27/28

Building a Environmental 303-1/303-4/305-7/306-1/306-2/306-3/30 E2.1.1/E2.1.2/E2.1.3/E2.1.4/E2.2.1/E2.2.2/E

management 6-4/306-5 2.3/E5.5.1/E5.4.4/E5.6 E2.1/E2.2.1/E2.2.3/E2.2.5/E2.2.6/E2.2.7/E2.4 Article 29/30/31/33Shared Ecologi-

E1.3.1/E1.3.2/E1.3.4/E1.3.5/E3.3.3/E5.2/E5.cal Future Resource Utilization 302-1/302-3/302-4/302-5/303-2/303-3 4.2 E3.1/E3.2 Article 35/36

Ecological Protection Article 32

and Biodiversity 304-1/304-2/304-3 E4.1.1 E2.3.1/E2.3.2/E2.3.3

Innovation and Innovation-driven S2.1.1/S2.1.2/S2.1.3/S2.1.4/S2.1.5/S2.1.6/S2.1.7/S2.1.8/S2.1.10/ Article 42Development / S2.3 S2.1.11/S2.1.12/S2.1.13

Quality Safety and Quality of

Improvement: Products and Services 416-1/416-2 S2.1.1/S2.1.2/S2.1.3/S2.2 S3.3 Article 47

Driving Sustainable Supply

Chains 308-1/308-2/414-1/414-2 S3.1.1/S3.2.1/S3.2.2/E5.4.5 S3.1

Article 45

Industrial

Upgrades Information Security and

Privacy Protection / S2.2.3 S3.4

Article 48

Protection of employees’ 401-1/401-2/401-3/405-1/406-1/408-1/

S1.1/S1.2/S1.3.4/S1.5/S4.3.3 S4.1.1/S4.1.3/S4.1.4/S4.1.6/S4.1.8/S4.1.9/S4.1.11/S4.1.12 Article 49/50rights and interests 409-1

Training and Develop- Article 50

Social Respon- ment 404-1/404-2/404-3 S1.4 S4.3

sibility Fulfill- Occupational Health and 403-1/403-3/403-4/403-5/403-6/403-7/40 S1.3.1/S1.3.2/S1.3.3 S4.2 Article 50

ment: Co-creat- Safety 3-8/403-9

Response to National

ing a Better Policies 203-1/203-2/413-1 S4.2.1/S4.2.2/S4.4.3 S1.2.1 Article 40

Future

Rural revitalization 203-1/203-2/413-1 S4.2.1/S4.2.2/S4.4.2 S1.1 Article 39

Social Welfare 413-1 S4.3.2 S1.2.2 Article 40

ESG Performance Chart / / A2 Article 9

Appendix Indexes / / A3 Article 57

Feedback Form 2-26 / A6 Article 9

153 154Feedback Form

1.Your overall assessment of Xingfa Group’ s ESG performance:

□Very Good □Good □Average □Below Average □Poor

Dear Readers

Thank you for reading this report. We highly value and look forward to hearing your feedback on this report. Your 2. Your overall assessment of this report:

opinions and suggestions are crucial for us to continuously improve our ESG information disclosure management and

practices. We sincerely welcome and thank you for your valuable feedback! □Very Good □Good □Average □Below Average □Poor

3. How do you think Xingfa Group has performed in terms of communications with stakeholders

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You can contact us through the following methods: 4. How do you think Xingfa Group has performed in terms of corporate governance

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5. How do you think Xingfa Group has performed in terms of environment protection safety and occu-

Address:?Xingfa Building No. 188-9 Yanjiang Avenue Wujiagang District Yichang City pational health

Hubei Province China

□Very Good □Good □Average □Below Average □Poor

Tel.: 0717-6760939

6. How do you think Xingfa Group has performed in terms of the protection of employees’ rights and

interests

Email: dmb@xingfagroup.com

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7.How do you think Xingfa Group has performed in terms of ESG

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8. What are your opinions and suggestions on Xingfa Group’ s ESG performance and this report

155156